Financial system in Montenegro

Financial system in Montenegro – multi-level structure; its fundamental components are general fiscal market, establishments operating within it, and infrastructure facilities. Finsystem itself in this state has a bank-centric character: banking facilities make up primary market share – about 90%. Most intermediary fiscal operations are performed through banks.

Predominantly, banking establishments there are involved in next-mentioned:

• deposits;
• issuance of credit funds;
• payment services provision;
• work with fiscal tools, particularly, with financing of monetary remedies.

One more significant component of this sphere are firms providing insurance (except in cases related to life dange cases). Other parts of fiscal segment are accounted for by organizations involved in small credit transactions, investment fund structures and factoring firms.

There’s 1 stock exchange there. Via this platform, authorized broker firms have rights to trade in bonds, and other equity and debt tools. An essential role is assigned to Central Depository: it accepts securities for safekeeping, and organizations owning settlement mechanisms necessary for operations with securities.

Reliable payment system in terms of its status and functionality is CBCG. It has 2 elements – DNS and RTGS function on same platform.

Financial system in Montenegro: CBCG importance 

It includes the following components:

• RTGS – a mechanism that performs actual calculations of gross amounts and carries out transactions between parties;
• DNS performs deferred settlement of net-amounts in order to carry out transactions between banking establishments.

CBCG is basic mechanism for conducting payments; all fiscal elements are connected to it. Direct CBCG involvement is allowed, while agents acting as intermediaries in transactions aren’t participators in this system. Each party is needed to meet established norms of legislative frames that govern the activities of payment system as a whole. In addition, it’s necessary to comply with demands related to organizational, staff and mechanical parameters prescribed by Central Bank.

Powers of regulative frames determining and controlling operations of Montenegrin fiscal market are separated between certain official bodies.

1. Central bank. Competence of this body is supervision of banking establishments, MFIs and each financial company in Montenegro working with guarantee transactions.
2. Supervision of insurance firms activities.
3. Office controlling capital market. This body monitors functioning of investments funding structures and capital markets in general, in particular, over stock exchanges by private dealers with certain powers. In addition, this body also controls operations of shares settlement.

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