Guvernor's Departments

Guvernor's Departments

Financial Stability, Research and Economic Analysis Department

In order to further advance the functioning of the Financial Stability, Research and Economic Analysis Department, this document presents the tasks, responsibilities and proposal for the reorganization of the Department, whose activities are directly related to the main objectives, specific competencies and relevant articles of Law 03/L-209 on Central Bank of the Republic of Kosovo.

Department Responsibilities

  • To foster and to maintain a stable financial system, including a safe, sound and efficient payment system;

  • An additional objective of the Central Bank of the Republic of Kosovo, which shall be subordinated to its primary objective, shall be to contribute to achieving and maintaining domestic price stability;

  • Without prejudice to attainment of these objectives, the Central Bank of the Republic of Kosovo shall support the general economic policies of the Government of the Republic of Kosovo and the specific competencies of the CBK, such as: to recommend broad policy guidelines to the Assembly of the Republic of Kosovo and the Government of the Republic of Kosovo in the areas under its responsibility; and to conduct regular economic and monetary analyses of the Kosovo economy, to make the results public and to present proposals and measures to the Assembly and the Government based on such analyses.

Maintaining financial stability is a statutory obligation and primary objective for the Central Bank of the Republic of Kosovo. In order to maintain financial stability, the Department continuously identifies, monitors and analyses systemic risk through continuous monitoring of cyclical and structural macroeconomic developments and the financial system.

The assessment of risks and their potential impact on financial stability and consequently overall macroeconomic stability is carried out through regular qualitative and quantitative analyses, including the analysis of the performance of high-frequency economic and financial indicators, forecasts of key macroeconomic indicators and the application of models that address the cyclical, structural and cross-sectorial dimensions of systemic risk.

In order to ensure the smooth running of the Department's processes, to further enhance and advance the institutional capacities of the CBK for achieving the objectives set out in the Law on the CBK, to achieve the medium-term objectives foreseen within the Strategic Plan, to fulfil the recommendations issued by the IMF FSSR diagnostic mission and, most recently, by the Internal Audit process, this instruction proposes organizational changes consisting of the re-establishment of organizational divisions that simultaneously deal with the processes that are divided into the Department.

Financial Stability Division

Financial Stability Division Tasks are:

    • Identifies the progress of potential risks to financial stability through continuous monitoring of cyclical and structural financial and macroeconomic developments;
    • Assesses risks and their potential impact on financial stability and consequently overall macroeconomic stability through regular qualitative and quantitative analyses;
    • Applies and advances models that address the cyclical, structural and cross-sectorial dimensions of systemic risk, and reports on the dynamics in periodic reports to the Macroprudential Council and monthly reports to the Executive Board;
    • Provides recommendations on measures/policies and proposals to the respective reporting bodies/lines, to contribute to the stable and efficient functioning of the financial system;
    • Commits to advancing towards the operationalization of the macroprudential framework, both in the interpretation of key financial soundness indicators, and in enhancing research analysis through existing or new models in EAFSD, to address the dynamics of systemic risk;
    • Within the framework of the conceptual and empirical basis for making policies and communicating them, the FSD is committed to advancing the current Stress Test analysis/model towards a macroprudential Stress Test;
    • Engages in the design and implementation of a risk assessment survey with commercial banks; and
    • In accordance with the publications policy, prepares periodic analyses of the financial sector such as the Annual Report, the Financial Stability Report, the Quarterly Financial Stability Assessment and other periodic or non-periodic analyses such as scientific papers and other research materials.

  • In order to achieve these objectives, this Division will apply modern theories in economics, finance and similar disciplines, the use of econometrics and other quantitative methods, the use of spreadsheets, etc.

Research and Economic Analysis Division

Research and Economic Analysis Division Tasks are:

    • Advances the macroeconomic model for the economy of the Republic of Kosovo by moving to a macro-econometric model; Develops the model for early forecasting (NowCasting);
    • Updates the macroeconomic model on a quarterly and annual basis and presents it to the immediate management, the KMP and the EU;
    • Forecasts macroeconomic variables for assessing the growth of economic activity in the country, assessing interrelated developments in the financial system with an effect on financial stability - Stress-Test Analysis, as well as for assessing the behaviour of economic agents for the purposes of drafting macroprudential policies;
    • Recommends and proposes economic policies that contribute to a stable and prosperous macroeconomic environment;
    • Contributes to the expansion and deepening of economic analysis and research in support of policymaking;
    • Drafts the annual research plan according to the needs of the CBK and its mandate;
    • In accordance with the publication policy, prepares periodic analyses related to macroeconomic developments such as the Annual Report, the Quarterly Economic Assessment, the Financial Stability Report and occasional analyses such as scientific papers and other materials of a reporting nature;

  • Researches and analyses the effectiveness of macroprudential measures: engagement in research on emerging risks and trends within the financial sector, as well as the effectiveness of macroprudential measures in mitigating relevant risks; and

    • Conducts empirical research in support of research publications and their use in the policy-making process.

  • In order to achieve these objectives, this Division will apply modern theories in economics, finance and similar disciplines, the use of econometrics and other quantitative methods, the use of spreadsheets, etc.

Risk Management Department

The Risk Management Department is oriented towards achieving the objectives of the Central Bank of the Republic of Kosovo as set out in the Law, creating and maintaining the values set out in the strategic orientations and implemented in the operational engagements of carrying out work responsibilities.

Risk management is an integral part of all organizational processes, extending from strategic planning to operational plans and activities. The Department assists the decision-making process towards informed solutions, prioritizes actions, and highlights possible alternatives in the course of action. The Risk Management Department serves as a second line, with responsibility for monitoring the risk management adequacy according to the scope defined in this policy.

Department Responsibilities

    • Ensures that all CBK organizational units and information users are fully informed about the obligations and responsibilities arising from the regulatory framework for risk management;
    • Provides support to the CBK organizational units in fulfilling obligations and responsibilities in view of risk management;
    • Assesses the adequacy of the policies and procedures of the CBK departments and organizational units for risk taking;

  • Coordinates the work and flow of information throughout the risk management process;

    • Monitors and assesses the degree of exposure of CBK organizational units to risk, through the establishment of a comprehensive reporting mechanism and process;
    • Takes necessary actions to monitor and control material risks, trends and deterioration tendencies in accordance with the relevant policy and procedure framework;
    • Addresses the level of risk that is beyond the defined tolerance by preparing action plans to control and reduce the level of risk;
    • Monitors the adequacy of controls and established risk tolerance levels;

  • Initiates and promotes activities aimed at raising staff awareness of risk management, including by providing necessary training to CBK staff; and

    • Ensures that the Governor and the Executive Board are informed about the adequacy of risk management.

Financial Risk Division

Financial Risk Division Tasks are:

    • It is responsible for completing and updating the regulatory framework, for managing financial risk, and for implementing the responsibilities arising from the regulatory framework;
    • Drafts and proposes the Financial Risk Management Rule and other sub-legal acts that serve the purpose of the financial risk management framework in the CBK; and
    • Decides on the methods for calculating, assessing and consolidating financial risks which will be defined in the relevant Methodologies, to ensure:
    • That all financial risks (credit, liquidity and market) in the CBK have been identified;
    • That reliable methods and models are used to measure financial risk at the CBK;
    • That the identified financial risks in the CBK are managed and reported in a manner that provides the opportunity to properly understand the financial risk;
    • That limits and other controls at the CBK are monitored and reported;
    • That the reserves at the CBK are sufficiently liquid; and
    • That limits and other forms of control for financial risk management determined by the Executive Board of the CBK are monitored and reported.
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Operational Risk and Business Continuity Division

Operational Risk and Business Continuity Division Tasks are:

    • It is responsible for completing and updating the regulatory framework for operational risk management as well as implementing the responsibilities arising from such regulatory framework;
    • Provides support and ensures that all CBK organizational units and information users are fully informed about the obligations and responsibilities arising from the regulatory framework for operational risk management;
    • Assesses the adequacy of the policies and procedures of the CBK departments and organizational units for risk taking;
    • Coordinates the work and flow of information throughout the operational risk management process;
    • Monitors and assesses the degree of exposure of CBK organizational units to operational risk, through the establishment of a comprehensive reporting mechanism and process;
    • Takes necessary actions to monitor and control material risks, trends and deterioration tendencies in accordance with the relevant policy and procedure framework;
    • Addresses the level of operational risk that is beyond the defined tolerance by preparing action plans to control and reduce the level of operational risk;
    • Monitors the adequacy of internal controls and established operational risk tolerance levels;
    • Initiates and promotes activities aimed at raising staff awareness of operational risk management, including by providing the service of necessary training to CBK staff;
    • Creates and develops comprehensive business continuity plans tailored to different types of scenarios (natural disasters, system failures, power outages, natural disasters, etc.);
    • Conducts risk assessments to identify potential threats to the institution's operations and assess their impact;
    • Conducts business impact analyses (BIA) to identify critical functions in the institution;
    • Develops and documents business continuity policies to define procedures and responsibilities;
    • Updates and maintains the Business Continuity Plan;
    • Ensures that the Business Continuity Plan is effectively implemented in the institution;
    • Initiates and organizes regular testing of Business Continuity Plans to ensure their effectiveness;
    • Reviews and updates plans based on test results and lessons learned from tests and actual incidents; and
    • Conducts regular training sessions for employees on business continuity procedures and their roles during a disruption and promotes business continuity awareness within the institution.

Legal Department

The Legal Department is responsible for matters of a legal nature, namely the provision of legal services and support to the CBK and for the prevention of money laundering and terrorist financing in terms of compliance with AML/CFT.

This Department takes the necessary measures to ensure that all activities of the CBK are in accordance with the Law on the Central Bank of the Republic of Kosovo and other legal and sub-legal acts in force.

The Legal Department will have a leading role in the legislative and regulatory agenda in terms of leadership and coordination with the Licensing and Standardization Department, but also with other departments within the CBK as well as with other institutions.

Legislation Division

Legislation Division Tasks are:

    • Provides legal support in the drafting of primary and secondary legislation, as well as other internal acts;
    • Provides confirmation and legal opinions on legal acts submitted for approval by the Executive Board;
    • Provides legal opinions and advice within the scope of the Central Bank;
    • Drafts decisions, proposals and various materials requested by the leader or the person authorized by him/her;
    • Provides professional support in addressing challenges that arise on the path of European integration for areas that are under the responsibility of the CBK and that are related to the legal sphere;
    • Guides and assists departments and other organizational units of the Bank regarding standards for drafting legislation and other regulatory acts;
    • Provides legal support in drafting agreements between the CBK and local and international institutions;
    • In coordination with the relevant departments/divisions, participates in various meetings, when laws or other legal acts that are directly or indirectly related to the functions and tasks of the CBK are discussed;
    • Informs the Bank's management of any developments in law or other sub-legal acts that may affect the fulfilment of the CBK's tasks, analyses the possible consequences, and proposes appropriate reforms to take these developments into account; and
    • Other tasks as needed.

Legal Representation Division

Legal Representation Division Tasks are:

    • Represents and protects the interests of the Central Bank before courts and other justice institutions;
    • Cooperates with relevant departments/divisions during the court representation process;
    • Carries out preparatory actions with the aim of providing the most professional representation in various disputes when the CBK appears as a party;
    • Proceeds within deadlines with regular and extraordinary legal remedies, depending on the case, in other instances outside the CBK;
    • Maintains relevant records for represented cases;
    • Reports to the director for the purpose of informing him/her about the occurrences and progress of sensitive cases;
    • Provides confirmation and legal opinions on legal acts (notifications of administrative measures and other draft decisions);
    • Provides legal opinions, recommendations and advice as requested by the supervisor;
    • Provides legal support to the organizational units of the CBK regarding the implementation of the regulatory framework within the scope of the respective units;
    • Provides legal support in drafting proposed decisions from the scope of the relevant units; and
    • Other tasks as needed.

Public Relations and Financial Education Department

The Central Bank of the Republic of Kosovo exercises its activity autonomously and independently, namely, it performs the tasks and fulfils the objectives set by the Law. The independence and autonomy of the CBK in accordance with the best institutional practices conditions a high level of transparency and accountability on its part.

Furthermore, informing state institutions and the general public about the policies, tasks and operations of the CBK is one of its tasks. Also, one of its tasks is communication and cooperation with relevant international organizations.

Both of these tasks of the CBK are defined in Article 8 of the Law on the CBK and are in view of achieving its objectives set out in this Law. The Public Relations and Financial Education Department is the main organizational unit for external communication, coordination and development of relations with relevant state institutions and the general public.

This Department also contributes to maintaining and developing institutional relations with all financial system stakeholders.

Public Communication Division

Public Communication Division Tasks are:

    • Coordinates and develops institutional relations with state institutions;
    • Coordinates and develops communication with the media and the general public;
    • Contributes to maintaining and developing relationships with financial institutions;
    • Supports CBK protocol and organizes CBK meetings and conferences;
    • Regular updates the CBK website;
    • Organizes and directs CBK's engagements in the field of public financial education;
    • Edits and proofreads various publications and materials as well as provides oral and written translation services in Albanian, Serbo-Croatian and English;
    • Takes care of important internal communications.
    • Coordinates activities within the CBK that contribute to the provision of educational information to the general public;
    • Identifies the most appropriate and efficient ways to disseminate educational information to the public;
    • Promotes economic and financial issues through various forms of communication;
    • Coordinates and advances communication and cooperation with relevant counterpart institutions and offices in local institutions;
    • Organizes and ensures the minutes of the CBK's organizational activities;
    • Enforces the Rules of the Public Relations and Financial Education Department;
    • Coordinates communication with external parties and continuously strives to improve the CBK's relations with the public;
    • Edits and proofreads various CBK publications and materials;
    • Regularly edits, publishes and manages the CBK website, the CBK Financial Education website and publications on the intranet and all CBK social media accounts; and
    • It is the carrier of all activities with the public.

Financial Education Division

Financial Education Division Tasks are:

  • Promotes, develops and supports educational initiatives related to economic issues;
  • Coordinates activities in the implementation of the CBK Financial Education Program;
  • Prepares materials for the implementation of the CBK Financial Education Program;
  • Cooperates with local and international institutions on issues and activities within the Financial Education Program;
  • Promotes and provides information on financial education on the Financial Education page on the CBK website;
  • Organizes and coordinates various financial educational activities for students, youth, children and the general public; and
  • Identifies groups for providing financial education knowledge, including primary and secondary schools, universities, journalists, teachers, and others.

Recovery and Resolution Department

The CBK, being the Recovery and Resolution Authority, exercises the powers to intervene at a sufficiently early and rapid stage in the case of a bank that is failing or is likely to fail, in order to ensure the continuity of the bank's critical functions, minimizing the effect of its failure on the economy and the financial system.

The CBK, being the Recovery and Resolution Authority, when implementing emergency intervention tools and exercising emergency intervention powers, takes into account the following emergency intervention objectives.

Department Responsibilities

    • Ensuring the continuity of critical functions of the bank;
    • Avoiding significant adverse effects on the financial system, in particular by preventing the spread of risks, including to market infrastructure and by maintaining market discipline;
    • Protecting public funds by minimizing the use of extraordinary public financial support;
    • Protecting the depositors included in Law No. 03/L-2016 (as amended and supplemented from time to time); and
    • Protecting client funds and assets.

Planning, Strategy and Standardization Division

Planning, Strategy and Standardization Division Tasks are:

    • Cooperates closely with the Banking Supervision Department in preparing, planning and implementing decisions regarding extraordinary intervention in banks;
    • Drafts emergency intervention plans for each bank or at group level;
    • Undertakes extraordinary intervention actions against a bank or banking group if it considers that all conditions provided for by law or sub-legal acts have been met;
    • Ensures a fair, prudent and realistic assessment of the bank's assets and liabilities before taking any extraordinary intervention action, or exercising the power of write-down or conversion;
    • Implements extraordinary intervention tools such as: the sale of business tool; the bridge institution tool; the asset separation tool; and the bail-in tool;
    • Implements the emergency intervention tools individually or in any combination, at any time, provided that it implements the asset separation tool together with another emergency intervention tool;
    • Verifies compliance with the minimum criteria for regulatory capital and eligible liabilities of banks;
    • Takes any extraordinary intervention action, provided that such action ensures that depositors continue to have access to their deposits;
    • Exercises powers for extraordinary interventions which may be exercised individually or in any combination as provided for by law or sub-legal acts;
    • Collaborates closely with the Methodology and Standardization Division;
    • Builds human capacities in order to meet the objectives for emergency interventions;
    • Cooperates with emergency intervention authorities in the region, in EU countries and other countries;
    • Carries out the liquidation of banks;
    • Closely coordinates activities with the Ministry of Finance, Labour and Transfers, or its successor ministry, in order to meet the objectives for extraordinary interventions;
    • Closely coordinates activities with the Deposit Insurance Fund of Kosovo, in order to meet the objectives for extraordinary interventions;
    • Cooperates with Recovery and Resolution authorities in the region, in EU countries and other countries;
    • Builds human capacities in order to meet the objectives for emergency interventions;
    • Determines civil penalties for banks according to the Law on Banks and other sub-legal acts;
    • Conducts various analyses in order to meet the objectives for emergency interventions; and
    • Conducts impact analyses regarding drafted regulatory acts.

Chief Information Security Officer (CISO)

Tasks and Responsibilities

    • Supports the definition of cybersecurity strategy and objectives, ensuring that they are aligned with the institution's strategic goals;
    • Develops the cybersecurity program in line with the institution's cybersecurity strategies and ensures the implementation of the program to address risks and threats to cybersecurity in the institution;
    • Ensures that the cybersecurity objectives in the program are aligned with the strategic goals of the institution;
    • Supports the process of identifying, analysing, assessing and reporting cybersecurity risks as well as developing strategies to mitigate identified risks;
    • Develops policies and procedures for cybersecurity and ensures that the applicable regulatory framework for cybersecurity is maintained according to cybersecurity standards;
    • Develops and directs the incident response plan to effectively address cyber incidents and minimize the impact of potential incidents;
    • Develops procedures for reporting security incidents and collaborates closely with the ITD security team to handle incidents;
    • Assesses risks associated with third parties/service providers and proposes the development of mechanisms through which the institution ensures that service providers comply with established security standards;
    • Promotes a culture of cybersecurity awareness and ensures that training programs are developed to maintain and advance overall security in the institution;
    • Develops and maintains business continuity and disaster recovery plans. Through periodic testing and the results of these tests, provides the institution with recommendations on its capacity to recover from cybersecurity incidents;
    • Proposes necessary investments for cybersecurity by clearly addressing cybersecurity priorities in the implementation of annual plans and the achievement of strategic objectives;
    • Provides the Governor and the Executive Board with timely, complete and clear information regarding cybersecurity, security initiatives and the cybersecurity risk profile of the institution; and
    • Collaborates closely with the cybersecurity team at ITD to ensure that the CBK's cybersecurity strategy is effectively executed, enabling the maintenance and improvement of cybersecurity in the institution.