Moldovan parliament amends procedure for appointment, dismissal of members of governing bodies of National Bank of Moldova

The procedure for appointing members of the governing bodies of the National Bank of Moldova (BNM) has been amended. Thus, the President of Moldova will also be involved in the dismissal procedure, which means that, in addition to dismissal by a vote of two thirds of the total number of MPs, a decision by the head of state will also be required. The provision is included in a draft law approved by the parliament in the second reading, with the votes of 54 MPs, today.

The legislative amendments concern detailing more aspects related to the composition of the BNM governing bodies, the procedure for appointing and dismissing their members, their qualifications the duration of their mandates and their responsibilities.

Thus, at the time of appointing members of the governing bodies, it is necessary to consult the parliament speaker, the BNM Governor or the parliamentary commission for economy, budget and finance, depending on the position for which the candidate is put forward. An opinion will be issued indicating whether the proposed person meets the requirements.

At the same time, the President of Moldova will be involved in the procedure for dismissing the BNM governing bodies. In addition to dismissal by a vote of two thirds of the total number of MPs, a decision by the head of state will also be required.

“The most important provision proposed is the additional strengthening of the independence of the leadership of the National Bank of Moldova. Therefore, another player will be involved in the dismissal procedure – the President of  Moldova. In addition to dismissal by a two-thirds vote of the MPs, a presidential decision will also be needed to approve this dismissal,” said lawmaker Radu Marian, head of the parliamentary commission for economy, budget and finance.

Asked to comment on the application of this practice in other states, MP Radu Marian noted that the procedure differed in many countries and that the ultimate goal of the authorities was to strengthen the independence of the central bank.

“There is no EU-level obligation, no directive requiring the president to be involved, but practices differ. In Italy, for example, this practice is a sovereign choice of the country in determining the way for dismissing the governor of the central bank,” Radu Marian noted.

The draft also provides for the removal from the BNM Supervisory Board of a member who also sits on the Executive Board. It is about the deputy governor of the National Bank. On the other hand, the number of members of the Supervisory Board who are not employees has been increased from 4 to 5. The number of mandates for members of the Supervisory Board who are not also members of the Executive Board has been reduced from 7 to 5 years.

The document was drafted by the National Bank, under the auspices of the International Monetary Fund and is being promoted by the Finance Ministry. The legislative amendments will enter into force on the date of publication in the Official Journal. However, the provisions related to the Supervisory Board will apply to members appointed after the law enters into force.