Skopje, 20 April 2023

At its meeting, the Financial Stability Committee adopted the Strategy for implementation of the macro-prudential policy in the Republic of North Macedonia, prepared by the National Bank, in consultation with the other financial regulators, in accordance with the new Law on Financial Stability. The Strategy strengthens the coordinate approach of financial regulators for further strengthening of financial stability. At its meeting, the Committee also pointed out the efforts of regulators to continue and intensify the Euro-integration activities, and within these frames the participants emphasized the need for completion of the process of adopting several systemic laws from the financial area that will contribute to the maintenance and further strengthening of financial stability.  The financial system in the country is stable, and the developments in the banking system in the USA and Switzerland hardly had an impact on it. The competent regulators monitor the situation in a coordinated manner and are ready to act fast, to adjust the policies in accordance with the developments, in order to maintain the financial stability which is a priority.

These are some of the conclusions from today’s meeting of the Financial Stability Committee, which was chaired by the Governor of the National Bank, Anita Angelovska Bezhoska, attended by the Minister of Finance, Fatmir Besimi, the President of the Council of Experts of the Agency for Supervision of Fully Funded Pension Insurance (MAPAS), Maksud Ali, the President of the Council of Experts of the Insurance Supervision Agency (ISA), Krste Shajnoski and the Legal Advisor in the Securities and Exchange Commission, Mate Stojanovski. 

Referring to the situation in the banking sector, the Governor Angelovska Bezhoska emphasized that the banking sector is sound and stable and with a high level of resilience to shocks. The direct effects of the latest developments in the global financial markets on the Macedonian banking system are limited, given the application of a traditional business model by banks, the low exposure and external liabilities, as well as the low level of banks' investments in securities. “The latest data as of 31.3.2023 show that the balance sheets of our banks are solid, with high level of capital (the highest level in the last decade), traditionally solid liquidity and solid quality of the credit portfolio with low level of non-performing loans of 2.8%. Previously adopted measures for increasing the rate of the countercyclical capital buffer to 0.75% contribute to strengthening the banking system stability and resilience. The National Bank will continue to carefully monitor the situation and take appropriate macro-prudential and micro-prudential measures to further strengthen stability. The macro-prudential strategy is important for the further strengthening of the coordinated approach of financial regulators” - Angelovska Bezhoska said.

"The Ministry of Finance, as an institution competent for the operations of financial and leasing companies, constantly monitors the operations in this segment. The Law on Financial Companies which will contribute to greater protection of citizens who use services from financial companies is in a phase of second reading in the Assembly, and we expect that it will enter into force very soon. The new Law will significantly reduce the fees that citizens pay to financial companies”, said the Minister of Finance, Fatmir Besimi.

The President of the Council of Experts of the Agency for Supervision of Fully Funded Pension Insurance - MAPAS, Maksud Ali, emphasized that MAPAS provides constant functioning, development and promotion of the second and the third pillar, transparency and efficient supervision of the second largest segment in the financial sector in the Republic of North Macedonia. MAPAS carefully monitors the situation in the fully funded pension insurance and the potential risks in the second and the third pillar, in general, and of course with special emphasis on the global situation and the reaction of pension companies with respect to their investment strategies and tactics in order to generate the highest yield, only in favor of the pension fund members.

Maksud Ali stressed that the pension funds minimally felt the latest developments in the banking sector and the markets in the USA and Switzerland through the global reduction of the value of shares from the financial sector, because the assets of the pension funds are not directly distributed to the Silicon Valley Bank, Signature Bank and Credit Suisse.

“The insurance sector in Macedonia is not directly exposed to the risks which arose globally. Total investments in financial instruments abroad are insignificant and make up only 0.1% of the total assets of the insurance sector. No potential unfavorable movements for the stability of the insurance sector of changing the value of these investments have been determined. Most of the total liabilities and assets of the insurance companies result from the insurance contracts concluded with domestic clients (legal entities and natural persons). At the end of 2022, the total assets of the insurance sector amounted to Denar 30.4 billion. Investments are mainly in government bonds and deposits in domestic banks. The capital of the insurance companies originates from financial instruments of the highest quality which is an indicator of the safety and stability of insurance companies and their ability to respond to unforeseen events and obligations in the operations”, said Krste Shajnoski, President of the Council of Experts of the Insurance Supervision Agency (ISA).

The Legal Advisor in the Securities and Exchange Commission, Mate Stojanovski, underlined that although the investments of the open-end investment funds in the USA account for 14% of the total investments in securities, no risky placements that can have a negative impact on the fund industry have been recorded, which excludes the possibility of any effect on the entire financial system. However, the need for close monitoring of the developments exists and the Strategy for implementation of the macro-prudential policy in the Republic of North Macedonia, adopted today, will serve for that purpose, which is a good basis for a coordinated approach of regulators to maintain and strengthen financial stability relative to markets.

The Strategy for implementation of the macro-prudential policy in the Republic of North Macedonia, adopted on the basis of the Law on Financial Stability, sets the framework for operational implementation of the macro-prudential policy, which primarily concerns the financial system and its stability. More specifically, the Strategy sets the objectives of the macro-prudential policy, the activities for monitoring and assessment of the systemic risk, defines the indicators of systemic risks, macro-prudential instruments and taking macro-prudential measures. The Strategy also pays special attention to the transparency in the operation of financial regulators and the Financial Stability Committee, as well as the cooperation between the competent authorities and the coordination between the macro-prudential policy and the other policies, such as monetary policy, micro-prudential policy, fiscal policy and other relevant policies. The Financial Stability Committee takes care of the implementation of the macro-prudential strategy, and each regulator can further regulate the implementation of the macro-prudential policy within its competence and adjust it to the specifics of the appropriate segment of the financial system.

When developing the Strategy one followed the recommendations of the European Systemic Risk Board, as well as the IMF guidelines for the macro-prudential policy and the features of the domestic financial system.