11/11/2024

The European Commission has published its latest report on Kosovo's progress relating the European integration process, whereby assessed the main developments of the financial system and the Central Bank of the Republic of Kosova (CBK), identifying areas that require further alignment with the EU standards.

The report considers the banking system as stable and with a strong pace of expansion, high levels of capitalization and significant growth in lending and deposits compared to previous years. In this view, it is appraised approval of the Regulation on Liquidity Risk Management and suggests continuous work in implementing the Directive and Regulation on Capital Requirements.

The report, in particular, appraises the considerable progress in the development of an adequate governance structure of the CBK, following the appointment of the new Governor, and completion of the Executive Board. Moreover, according to the Report, the new five-year Strategic Plan of the CBK, launched at the end of 2023, is expected to strengthen its operational efficiency.

The report assesses the contribution of the CBK in dealing with money laundering through the adoption of the risk-based supervisory framework and the signing of a Memorandum of Understanding with the Financial Intelligence Unit, which further reinforces the country's commitment to international standards in combating financial crimes. In this view, the report appraises the progress of the CBK in combating money counterfeiting and withdrawing counterfeit money from circulation.

The report also mentions other advancements, such as enabling IBAN to NBFIs, which marks an important step in the advancement of payment services and financial inclusion. It also appraises the CBK's membership with the Sustainable Finance and Banking Network, which aligns the financial system with international sustainability standards through the integration of ESG principles in the banking sector.

The Report have also been identified areas where further improvements are required, including careful monitoring of credit growth, advancement of the payment system, further alignment with European legislation in the field of insurance, payments and capital markets.

The CBK remains committed to developing the legal framework and financial infrastructure, necessary to support economic growth and long-term stability, pursuant to its mandate.