PODGORICA, September 27, 2011 – The Minister of Finance of Montenegro, H.E. Milorad Katnic and the World Bank Country Director and Regional Coordinator for Southeast Europe, Ms. Jane Armitage yesterday in Washington signed a Loan Agreement for a First Programmatic Financial Sector Development Policy Loan (FSDPL1) to Montenegro in the amount of EUR59.1 million.
This budget support loan backs a comprehensive program of measures implemented by the Central Bank of Montenegro and the Government of Montenegro over the past two years with the objective to mitigate the impact of the global financial crisis and increase the resilience of the banking sector to possible future shocks.
"We are pleased to support the reform efforts by the Montenegrin authorities to strengthen the banking sector”, stated Ms. Armitage. “These reforms, that are an integral part of the country's EU accession strategy, will increase confidence of citizens in the banking sector, and will facilitate the resumption of prudent lending activities by the banking sector in Montenegro”.
During the FSDPL1 preparation specific reforms have been undertaken by the Montenegrin authorities with support of the World Bank in the following five areas: (i) maintaining market confidence; (ii) strengthening bank liquidity framework; (iii) assessing and addressing banking sector vulnerabilities; (iv) enhancing regulatory framework for banking sector in line with the international and EU best practices; and (v) problem bank restructuring.
The reform program supported by this operation is part of the recently approved Country Partnership Strategy aiming to support EU integration through strengthening institutions and competitiveness in line with EU accession requirements.
The World Bank portfolio of active projects in Montenegro now includes seven projects in areas of health, energy, land management, agriculture and environment worth approximately US$84 million.