The Central Bank of the Republic of Kosovo welcomes the European Commission’s positive assessments on the stability of the financial sector and progress of its institutional reforms

The Central Bank of the Republic of Kosovo (CBK) welcomes the European Commission’s positive assessments of the financial sector in the 2025 Kosovo Report. The report highlights that the country’s financial sector has maintained high resiliency, increased capitalization, and made significant progress in aligning with European Union standards.

According to the report, Kosovo’s banking sector continued to expand at a steady pace, maintaining adequate levels of capital and liquidity. The report highlights that banks’ regulatory capital increased significantly above the required minimum, while the ratio of non-performing loans remained at a historically low level. It also commends the adoption of the Regulation on Macroprudential Capital Buffers and the plan for implementing the Supervisory Review and Evaluation Process (SREP), in line with the guidelines of the European Banking Authority (EBA).

In the field of payments, the report highlights the progress made through the adoption of the Law on Payment Services and the CBK’s membership in the European Automated Clearing House Association (EACHA), which enables direct cooperation with central banks of EU member states to advance payment systems. It also notes the growth in the number and value of electronic payments during 2024, as well as the expansion of financial service coverage in the northern municipalities of Kosovo.

The European Commission praises the active role of the Central Bank of the Republic of Kosovo in combating euro counterfeiting, emphasizing the concrete measures taken to strengthen mechanisms for the prevention and detection of counterfeit currency. The CBK has taken steps to improve the handling of counterfeit euro banknotes and coins and to enhance cooperation with domestic and international institutions in this area, in accordance with EU standards.

The CBK has also received positive recognition for its steps toward digitalization and sustainable finance. The report highlights the adoption of an action plan for managing climate and environmental risks in the financial sector, as well as strengthened cooperation with the Kosovo Credit Guarantee Fund, which has enabled increased access to finance for small and medium-sized enterprises, supporting projects in agriculture and energy efficiency.

The report acknowledges progress in the fight against money laundering and terrorist financing through the adoption of new laws on AML/CFT, Payment Services, and Crypto-Assets  aiming to align with the EU’s Fourth and Fifth Anti-Money Laundering Directives. The European Commission noted the CBK’s transition from a compliance-based supervisory framework to a risk-based one, harmonizing practices with international FATF and EU standards.

The report also recognizes the CBK’s achievements in strengthening internal governance, including the completion of institutional restructuring, enhancement of the human resources framework to attract and retain professionals, and the establishment of a dedicated Cybersecurity Division, accompanied by the adoption of the Cybersecurity Strategy 2025–2028.

While the report acknowledges notable progress, it recommends that Kosovo continue efforts to advance the collection and analysis of financial data, develop a comprehensive framework for bank recovery and resolution, and improve the financial market infrastructure.

The Central Bank of the Republic of Kosovo remains committed to continuing reforms that strengthen financial stability, institutional governance, and further alignment with the EU acquis, in line with Kosovo’s European integration objectives, while expressing high appreciation to the European Commission for its cooperation and support. The full European Commission 2025 Report on Kosovo is available here
🔗 https://enlargement.ec.europa.eu/document/download/127563ea-4c03-44a4-b56c-2d569afd86a5_en?filename=kosovo-report-2025.pdf.