The reform of the financial - banking sector that we are witnessing lately is one of the most discussed topics by Western partners who give money to Moldova. We tried to detail the subject in an interview that was given exclusively for Deschide.MD, by the Governor of the National Bank, Sergiu Cioclea. I didn't miss the chance to ask questions, which concern the citizens now: what will we see in the next period on the boards of the currency exchanges, how legal has been the sale of the hotel "Codru" will the Kroll-2 report be or not declassified, are money still being stolen from the Moldovan banks?

— Signing the agreement with the IMF which was held recently, is a success of the authorities and the institution you lead. We know it is not easy to sign an agreement with the IMF that comes with certain conditions, rigors or requirements imposed to the authorities to start the financing program. What will be the priority destination of the first tranche that already reached the NBM account?

— The IMF agreement was approved by the Fund's Executive Board on November 7. The first tranche - 35 million US dollars - has already been transferred to the account of the National Bank. Five more will follow that by March 2019 for a program total of 180 million US dollars. From the first installment, about two thirds are for the Ministry of Finance, for budgetary support. More important it is that the IMF agreement allows us to unlock also World Bank programs: negotiations in this regard were resumed, as well as funding from the European Union. This money is important for budget financing, but also for revival of investment in our country. Much of the measures program agreed with the IMF is dedicated to promoting banking reforms, which needs to be revived urgently.

— One of the Fund's preconditions was related to the ownership transparency in the finance-banking sector. NBM has blocked a group of shareholders of the two banks. What is the fate of shares package under the administration of NBM from Moldova Agroindbank and Moldinconbank?

— One of the biggest problems in the banking sector is exactly the quality of ownership. The transparency of ownership and improvement of corporate governance are the main goals of the program agreed with the IMF and in fact, the reforms promoted by NBM. At MAIB, even my predecessor Dorin Dragutanu decided to block about 42% of the shares acquired and held by shareholders without the permission of the NBM. I think we're at the last stage of marketing these actions. They were first proposed for sale by the shareholders whose rights have been blocked. Then, after they failed to sell them, the shares have been canceled; new ones were issued in the same number, and put on sale in September. Currently we have institutional investors, who are exploring the possibility of purchasing those shares. Regarding Moldindconbank, we are at the beginning. Blocked shareholders were made aware of the obligation to sell those shares. We hope that this bank will attract a strategic investor because a majority stake will be exposed for sale. Our aim is that these measures allow a quality investor in the system and this program with the IMF is quite welcome, because it is a signal to those who would like to buy the shares in question: the signal that they can invest in Moldova.

— What are the chances for a new issue of shares and cancellation of the current package from Moldinconbank?

— At this stage we should give a chance to the current shareholders to sell their shares. It is premature to guess what will be the fate of these shares: whether they will be sold or not. The fact is that we have a procedure for the sale of MAIB shares and we hope that it constitutes a success precedent. However, we are talking of a majority interest and must be seen in case of failure, if there are other solutions of commercialization.

— To what extent the acquisition of the hotel complex "Codru" by MAIB was coordinated with the BNM (taking into account, of course, that MAIB is under the administration of NBM) and which was the purchase price?

— We cannot tell you the purchase price: it is confidential. However we, of course, put this question to the MAIB management. It was important to understand if the transaction falls or not under market prices. We had other questions, too. For example, we requested to justify the need for this procurement. The bank came up with several explanations, including technical justification that for a longer time was decided to find a new headquarters. Another question was whether competitive procedures were respected: a transparent competition, overseen by the governing bodies. However, in the end, the key question for us was whether the transaction will allow the bank to comply with prudential coefficients; the answer to this question was satisfactory. Finally, after several discussions with MAIB management and taking into account the answers that we received, we decided not to block this transaction. I recognize that it seems surprising for the public that a bank buys a hotel, but there were such precedents: Mobiasbanca, for example, bought the former hotel "Moldova" building, turning it into its headquarters.

— We know that for half a year, NBM lowered the base rate of the monetary policy by about 10 percentage points. Is National Bank intending to reduce further the base rate in order to cheaper loans? Why lowering the past rate has led to a slight decrease of credit interest, nor to a substantial cheapening of them?

— It is true that in half a year, we lowered the rate from 19.5 percent by year to 9 percent, more than 10 percentage points. Meanwhile, new loans granted to traders, were cheaper on average from 15% to 13%, with only 2 percentage points. We realize that not only the base rate that commercial catalyst for cheaper loans. In parallel, the commercial banks must be able to estimate the economical risk at a lower level. The interest rate reflects the economic risk. Unfortunately, we are in a phase of weak growth and some enterprises have difficulties in the repayment of loans or contracting new loans. We find that from the stock of bad loans that grows. In these circumstances, it is unlikely to see a sharp decline in credit market conditions. However we hope that the situation will improve.

— In the context of reducing the volume of remittances from the Russian Federation and exerting of pressure on the Moldovan MDL which you think that will be the foreign exchange market developments in the medium term and what factors may contribute to the stability of the currency parity?

— The MDL has suffered a significant depreciation in 2015, but it has been compensated a specific loss of competitiveness due to the devaluation of the Russian ruble and the Ukrainian hryvnia in the past. Today we do not identify significant pressures on the balance of payments that would justify a concern of depreciation of the MDL. We believe that we are in a phase of stabilization, confirmed by the evolution of exchange in 2016. We can follow, however, seasonal cycles, during the summer; we have a stronger MDL, because we have an influx of foreign exchange from export of agricultural produce and more remittances, and in winter - a slight depreciation, considering the need to use the currency to buy oil, coal and other fuels for heating etc. I remind you that the purpose of monetary policy is the price stability, namely inflation targeting not the exchange rate, which does not mean we do not care or the MDL - our interventions aim to eliminate the volatility in the Forex market but we have a flexible replacement policy.

— The second Kroll report will be made public or, as in the first report, there is a confidentiality clause?

— We are, indeed, in the second phase of the investigation that aims to detect and return the stolen money. This goal requires confidentiality as a protective measure. If the Kroll publish the names of the beneficiaries and ways through which the money will be recovered, we offer them on the tray, all the sensitive information. The confidentiality at this stage is for the good of the mission to detect and to recover the money. We do not exclude, however, that after the recovery phase, we will ask the Kroll Company to lift the confidentiality clause, so that we can publish the report.

— Recently, from a branch of FinComBank were emptied several private safes. Earlier, the National Bank has informed us that it knows about the case. What is the total damage and what BNM has undertaken to ensure that such situations are not repeated?

— The value of goods stolen from safes have not been communicated to us: the case is investigated by the resort institutions. Let us not forget that some people who deposit goods in safes do not declare them immediately to the police. We have warned and the FinComBank and other banks on these risks and we asked for protection of audit procedures.

— In the parliament was submitted a project that plans to increase the salaries of NBM employees. Do you think that's good in the context of budget cuts in other areas, but also of the condition of the IMF not to raise salaries during this period to anyone?

— The IMF has not imposed a ban on individual wage increase in the budgetary sphere. The IMF condition is to decrease the growth rate of overall costs. As for the National Bank, the IMF recognizes the need to adjust the wages in order to be competing with the commercial sector. 

The program with the IMF and our commitments require us to increase the number of employees in certain areas (such as banking supervision) and to keep the powerful specialists, for example the lawyers and the specialists in IT who can find work in the private sector. The statistics of National Bank of Moldova confirms that we're not well in the matter of maintaining the employees in the service of National Bank, because we are in competition with the banking domain that we need to watch it. To give an example: in 2015 we employed 49 people, but resigned 54. In 2016 we hired 54 but resigned 47. It is all more regrettable, since it's about young potential. It is difficult for us to fulfill the supervisory function, and to keep the specialists without correcting the salary system at the NBM. We have now all the solutions, but we do a market study, to see more clearly the reasons why we are losing employees and where they go, to be able to come up with further proposals on wage policy adjustment at the NBM.

— Have you ever regretted during this period, that you have accepted the position of Governor of National Bank of Moldova? ...

— I do not live with regrets. If I am faced with a problem, I try to solve it. However, I admit that I went through difficult moments as well. But each time, I found a solution and I came out of these situations more wisely.

— You have started several changes, both at the National Bank of Moldova as well in the banking sector: the transparency of the shareholder, the improval of the legal framework etc. How do you appreciate them, and what is their purpose? How do you see the National Bank of Moldova in the future?

— Most importantly, these changes should be irreversible and sustainable. I think that the measure taken in the last 6-7 months marks a shift in the right direction. There are other challenges as well, many risks, I will not now pass them in the review, I would just mention that I remain optimistic and I think we will be able to cope.