Guvernor's Departments

Guvernor's Departments

Recovery and Foreclosure Department

The Central Bank of the Republic of Kosovo, according to the new Draft Law on Banks, will be the Recovery and Closing Authority for banks and branches of foreign banks operating in the Republic of Kosovo. The CBK as Recovery and Closure Authority exercises powers to intervene at a sufficiently early and rapid stage in the case of a failed or likely to fail bank, in order to ensure continuity of the bank's critical functions, minimizing the effect of its failure on economy and in the financial system.

Emergency intervention instruments create the possibility that the first to bear the costs of a possible bank failure are shareholders, followed by creditors, provided that no creditor bears losses greater than the losses that would be incurred if the bank were to fail. to have been liquidated according to the usual forced liquidation procedure.

The Recovery and Closure function of the CBK should be functionally independent and separate from other functions within the CBK.

The personnel assigned to the Recovery and Closure Department will be structurally separated and subject to separate reporting lines from the personnel assigned to the Banking Supervision Department and from other functions within the CBK.

This Department is expected to initially have (3) three people engaged, including the head of the Department.

The objectives of the extraordinary intervention

CBK as Recovery and Closure Authority in the cases of the implementation of instruments of extraordinary intervention and exercise of powers of extraordinary intervention, it takes into account objectives of extraordinary intervention as follows:

  • Ensuring continuity of the bank's critical functions;

  • Avoiding a significant negative effect on the financial system, in particular by preventing the spread of risks, including market infrastructure and maintaining market discipline;

  • Protection of public funds by minimizing the aid of extraordinary public financial support;

  • Protection of depositors included in Law 03/L-2016 (amended and replaced from time to time); and

  • Protection of client funds and assets.

Planning, Strategy and Coordination Division

The tasks of the Planning, Strategy and Coordination Division are:

  • Collaborates closely with the Department of Banking Supervision in the preparation, planning and implementation of decisions related to extraordinary intervention in banks;

  • Draws up emergency intervention plans for each bank or at the group level;

  • Undertake extraordinary intervention actions against a bank or banking group if it considers that all conditions provided by law or by-laws have been met;

  • It ensures fair, measured and real assessment of the bank's assets and liabilities before taking any action for extraordinary intervention, or exercising the power of reducing the value or conversion;

  • Implements instruments of extraordinary intervention such as: instrument of sale of activity (commercial activity); bridge institution instrument; asset allocation instrument, and internal recapitalization instrument;

  • Implements emergency intervention instruments individually or in any combination, at any time, provided that it implements the asset allocation instrument together with another emergency intervention instrument;

  • Verifies the fulfilment of minimum criteria for regulatory capital and liabilities acceptable to banks;

  • Undertake any extraordinary intervention action, provided that such action ensures that depositors continue to have access to their deposits;

  • Exercises powers for extraordinary interventions which can be exercised individually or in any combination as provided by law or by-laws;

  • Collaborates closely with the Methodology and Standardization Division;

  • Raise human capacities in order to fulfil the objectives for extraordinary interventions;

  • Cooperates with emergency intervention authority in the region, in EU countries and other countries;

  • Performs the liquidation of banks;

  • It closely coordinates activities with the Ministry of Finance, Labor and Transfers , or its successor ministry, in order to fulfil the objectives for extraordinary interventions;

  • Closely coordinates activities with the institution for the Deposit Insurance Fund in Kosovo, in order to fulfil the objectives for extraordinary interventions;

  • Cooperates with Recovery and Closure authority in the region, in EU countries and other countries;

  • Raises human capacities in order to fulfil the objectives for extraordinary interventions;

  • Determines civil penalties for banks according to the law on banks and other by-laws;

  • Performs various analyses in order to meet the objectives for exceptional interventions.

  • Performs impact analyses related to drafted regulatory acts;

Risk Management Department

The Risk Management Department is oriented towards achievement of objectives of the Central Bank of the Republic of Kosovo defined by Law, the establishment and preservation of values defined in the strategic orientations and implemented in the operational commitments of the performance of 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, priority treatment of actions and highlights possible alternatives in the course of actions.

This Department currently has (3) three people engaged, including the manager and other staff.

Area of responsability

The Risk Management Department serves as the second line, with the responsibility to monitor the adequacy of risk management according to the scope defined in this policy.

  • It ensures that all CBK’s organizational units and information users are fully informed about the obligations and responsibilities arising from the regulatory framework for risk management;

  • Provides support to CBK's organizational units in fulfilling obligations and responsibilities in terms of risk management;

  • Assesses the adequacy of CBK's departments and organizational units’ policies and procedures for taking risks;

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

  • Follows and evaluates the degree of CBK organizational units’ exposure to risk, through the establishment of a comprehensive reporting mechanism and process;

  • Undertake the necessary actions for monitoring and controlling material risks, trends and deterioration trends in compliance with the relevant policies and procedures framework;

  • Handles the level of risk beyond defined tolerance by preparing action plans to control and reduce the degree of risk;

  • Monitors the adequacy of controls and defined risk tolerance levels;

  • Initiates and promotes activities in order to raise the awareness of the personnel for risk management, including the necessary training service for the CBK personnel;

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

Operational Risk Division

Operational Risk Division duties are:

  • It is responsible for completing and updating the regulatory framework for operational risk management, as well as implementing 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 CBK departments and organizational unit’s policies and procedures for taking risks;

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

  • Follows and assesses the degree of CBK’s organizational units’ exposure to operational risk, by establishing a comprehensive reporting mechanism and process;

  • Undertake the necessary actions for monitoring and controlling material risks, trends and deterioration trends in compliance with the relevant policies and procedures framework;

  • Handles the level of operational risk beyond the defined tolerance by preparing action plans for keeping under control and reducing the level of operational risk;

  • Monitors the adequacy of internal controls and defined levels of tolerance to operational risk;

  • Initiates and promotes activities in function of personnel awareness for operational risk management, including the necessary training services for CBK personnel;

  • Creates and develops comprehensive business continuity plans tailored to different types of scenarios (natural disasters, systems failures, power outages, natural disasters, etc.);

  • Conduct risk assessments to identify potential threats to the institution's operations and to assess their impact;

  • Conduct business impact analysis (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 its effectiveness;

  • Reviews and updates plans based on test results and lessons learned from actual tests and incidents;

  • Conducts regular training sessions for employees on business continuity procedures and their roles during an outage and promotes business continuity awareness within the facility.

Financial Risks Division

The tasks of the Financial Risks Division are:

  • It is responsible for completing and updating the regulatory framework, for financial risk management as well as the implementation of the responsibilities arising from the regulatory framework ;

  • Drafts and proposes the Financial Risk Management Rule and other by-laws in the service of the financial risk management framework in CBK;

  • Decide on the methods for calculation, evaluation and consolidation of financial risks which will be defined in the respective methodologies, to ensure:

    • That all financial risks (credit, liquidity and market) in CBK have been identified;
    • That reliable methods and models are used for measuring financial risk in CBK;
    • That the financial risks identified in CBK are managed and reported in such a way, that also provide the opportunity to understand the financial risk well;
    • That other limits and controls in CBK are followed and reported;
    • That the reserves at CBK are sufficiently liquid;
    • That the limits and other forms of control for financial risk management determined by the Executive Board of CBK are forwarded and reported.

Legal and Compliance Department

The Legal and Compliance Department is responsible for matters of a legal nature, respectively providing service and legal support to the CBK and for prevention of money laundering and terrorist financing in terms of compliance with PPP/LFT.

This Department takes necessary measures in order to ensure that the entire activity of CBK is in accordance with the “Law on the Central Bank of the Republic of Kosovo” as well as other applicable legal and sub-legal acts.

The Legal Department will have the 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.

This Department currently has (5) five people engaged, including the manager.

Legislation and Regulation Division

The duties of the Legislation and Regulation Division are:

  • Providing legal support in the drafting of primary and secondary legislation, as well as other internal acts;

  • Providing confirmation and legal opinions for legal acts that are submitted for approval by the Executive Board;

  • Provides legal opinions and advice from the scope of the Central Bank;

  • Drafting of decisions, proposals and various materials requested by the leader or the person authorized by him/her;

  • It offers professional support in addressing the challenges that arise in the path of European integration for the areas that are under the responsibility of the CBK and that are related to the legal sphere;

  • Guides and helps the departments and other organizational units of the bank regarding the drafting standards of legislation and other regulatory acts ;

  • Providing legal support in the drafting of agreements that the CBK connects with local and international institutions;

  • In coordination with the relevant departments/divisions, participation in various meetings, when laws or other legal acts are discussed that are directly or indirectly related to the functions and duties of the CBK;

  • Informing the bank's management about any development in the law or other sub-legal acts that may affect the fulfilment of CBK's duties, analysing the possible consequences and proposing appropriate reforms to take these developments into account;

  • Other duties as needed.

Legal Representation Division

The duties of the Legal Representation Division are:

  • Representation and protection of the interests of the Central Bank before courts and other justice institutions;

  • Cooperation with relevant departments/divisions during the judicial representation process;

  • Carrying out preparatory actions with the aim of the most professional representation in various disputes when the CBK appears as a party;

  • Proceeding within the deadlines with regular and extraordinary legal remedies, depending on the case in other instances outside the CBK;

  • Keeping relevant evidence for the cases represented;

  • Reporting to the director for the purpose of notifying about occurrences and progress of sensitive cases;

  • Providing confirmation and legal opinions for legal acts (notifications for administrative measures and other draft decisions);

  • Provides legal opinions, recommendations and advice as requested by the supervisor;

  • Provides legal support to CBK’s organizational units regarding the implementation of the regulatory framework from the scope of the respective units;

  • Provides legal support in the drafting of proposal-decisions from the scope of the relevant units;

  • Other duties as needed.

Compliance Division

The duties of the Compliance Division are:

  • Development and implementation of policies and procedures for prevention of money laundering and terrorist financing in terms of compliance with PPP/LFT;

  • Continuous risk assessment of money laundering and terrorist financing of the financial sector;

  • Continuous monitoring of transactions and activities for suspicious or unusual behaviour that may indicate money laundering or terrorist financing;

  • Cooperating with law enforcement agencies and sharing information when required in investigations related to money laundering or terrorist financing;

  • Drafting necessary acts and guiding documents in order to prevent money laundering and fight the financing of terrorism;

  • Preparation of the annual work plans of the DPPP, including the plan for conducting examinations in the country;

  • Active monitoring and follow-up of transactions in a technical manner with the payment systems managed by CBK;

  • Implementation of general measures to ensure that CBK employees do not have a criminal past or are not the subject of an ongoing criminal prosecution for financial crimes, terrorism or any other serious crime that may call into question their credibility;

  • Reviewing the requirements of financial institutions for the approval of senior managers for the prevention of money laundering and the fight against terrorism financing;

  • Completion of "Know Your Customer" questionnaires of correspondent banks;

  • Maintaining regular cooperation and communication with correspondent banks;

  • Cooperation and coordination with the Investments Division in the framework of completing the "Know your customer" questionnaires of correspondent banks;

  • Cooperation with the DLS in the framework of the exchanging information related to the assessment of the suitability of natural and legal persons in terms of the field of PPP/LFT;

  • Cooperation and coordination with FIU-K regarding the exchange of information regarding PPP/LFT, as well as the undertaking of joint activities related to the supervision of financial institutions with compliance with PPP/LFT;

  • Cooperation with the BSD in the framework of the exchange of information regarding the compliance of banks with PPP/LFT;

  • Cooperation with the DMS in the framework of the exchange of information regarding the compliance of insurers with PPP/LFT.

Financial Stability and Economic Analysis

Preservation of financial stability constitutes a statutory obligation and a primary objective for the Central Bank of the Republic of Kosovo (CBK). In order to maintain financial stability, the department continuously identifies, monitors and analyses systemic risk through continuous monitoring of macroeconomic cyclical and structural developments, as well as the financial system. The assessment of risks and their potential impact on financial stability and consequently the overall macroeconomic stability is done through regular qualitative and quantitative analyses, including progress analysis of economic and financial indicators with high frequency, forecasts on the main macroeconomic indicators and application of models that address the cyclical, structural and cross-sectoral dimension of systemic risk.

The Financial Stability and Economic Analysis Department employs 10 staff members.

Duties and Responsibilities of the Department

For the purpose of a more advanced operation of the Financial Stability and Economic Analysis Department, this document presents the tasks, responsibilities and proposal for reorganization of the Department, whose activities are directly related to the main objectives, special powers and relevant articles of Law 03/L-074 on the Central Bank of the Republic of Kosovo:

  • Promote and maintain a stable financial system, including a safe, stable and efficient payment system;

  • An additional objective of the Central Bank, which is subordinate to its primary objective, is to contribute to the achievement and maintenance of domestic price stability;

  • Without prejudicing the achievement of these objectives, the Central Bank supports the general economic policies of the Government and the special powers of the CBK, such as:

  • At least once a year, and more often as needed, that the Central Bank will inform the Assembly of the Republic of Kosovo and the public about the implementation of its policies, the achievements of its objectives, as well as its perspectives in relation to the real economic indicators;

  • Within six months after the close of the financial year, the Central Bank will officially submit to the Assembly of the Republic of Kosovo and the Minister, as well as publish one or more reports approved by the Board of the Central Bank on the state of the economy during the recently completed financial year, including a forecast on the next year's economy, the achievement of its policy objectives and the state of Kosovo's financial system. The report should also contain a review and assessment of the Central Bank's policies followed during the previous financial year, as well as a description and explanation of the policies to be followed during the following financial year.

Economic Research and Analysis Division

The tasks of the Economic Research and Analysis Division are:

  • Advances the macroeconomic model for Kosovo’s economy by switching to a macro- econometric model; Develops the early forecasting model (NowCasting);

  • Updates the macroeconomic model on a quarterly and annual basis and presents it to the immediate management, KMP and EU;

  • It forecasts macroeconomic variables for assessing economic activity growth in the country, assesses related developments in the financial system with an effect on financial stability - Stress-Test Analysis, as well as for the assessment of economic agents’ behaviour 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 order to support policy-making;

  • In compliance with the publication policy, prepares periodic analyses related to macroeconomic developments such as the Annual Report, Quarterly Economic Assessment, Financial Stability Report and periodic analyses such as scientific papers and other reporting materials;

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

  • Conducts empirical research in function of research publications and their use for 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.

Financial Stability Division

The tasks of the Financial Stability Division are:

  • Identifies the progress of potential risks to financial stability through continuous monitoring of cyclical and structural financial and macroeconomic developments;

  • Assesses the risks and their potential impact on financial stability and consequently the overall macroeconomic stability through regular qualitative and quantitative analyses;

  • It applies and advances models that address the cyclical, structural and cross-sectoral dimension of systemic risk, and reports on the dynamics in periodic reports to the Macroprudential Council and monthly reports to the Executive Board;

  • Gives recommendations on measures/policies and proposals to the respective reporting bodies/lines, to contribute to the stable and efficient functioning of the financial system;

  • Committed to advance towards the operationalization of the macroprudential framework , both in the interpretation of the main indicators of financial health, and in the increase of research analyses through existing or new models in DAESF to address the dynamics of systemic risk;

  • Within the conceptual and empirical basis for policy making and communication, FS is committed to advance the current analysis/model of the Stress Test towards the Macroprudential Stress-Test;

  • Engages in designing and carrying out a survey with commercial banks for risk assessment;

  • In accordance with the publication policy, prepares periodic financial sector analysis such as the Annual Report, the Financial Stability Report, the Quarterly Assessment of Financial Stability 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.

Finance Department

The Finance Department is responsible for financial planning and reporting to CBK. In a more specific form, its responsibility extends to keeping financial books, preparing financial statements, financial analysis, budget planning and its implementation, management of grants allocated to CBK, processing of expenses and back-office work.

This Department currently has (11) five people engaged, including the manager.

Duties and Responsibilities of the Department

In view of the objectives and tasks of the CBK, the specific tasks and responsibilities of the Finance Department extend as follows:

  • Managing basic accounting and financial accounting functions;

  • Preparing and publishing financial statements;

  • Preparing financial analyses;

  • Compiling, controlling and implementing the annual budget and its follow-up;

  • Management of expenditure accounting records;

  • Management of grants allocated to CBK;

  • Processing of expenses and small payments;

  • Performing the back-office work for the nostro account transactions;

  • Communication and management of financial activities with IMF accounts;

  • Cooperation with external auditors and other relevant parties regarding aspects of finances and financial evidence in CBK.

Accounting and Payments Division

The duties of the Accounting and Payments Division are:

  • Management of basic accounting and financial accounting functions;

  • Processing of expenses and small payments;

  • Management of grants allocated to CBK;

  • Performing the back-office work for the nostro account transactions;

  • Communication and management of financial activities with IMF accounts;

  • Cooperation with external auditors and other relevant parties on aspects of finance.

Budget and Financial Reporting Division

The tasks of the Budget and Financial Reporting Division are:

  • Preparation of financial analyses;

  • Compiling, controlling and implementing the annual budget;

  • Preparing budget reports and its implementation;

  • Preparation of materials for reallocations and budget revisions;

  • Management of expense accounting records;

  • Management of grants allocated to CBK;

  • Cooperation with external auditors and other relevant parties regarding aspects of finance;

  • Preparation and publication of financial statements;

  • Preparation of financial analyses (for financial reports);

  • Preparation of financial reports for third parties (e.g. statistics);

  • Cooperation with external auditors and other relevant parties regarding aspects of finances and financial evidence in CBK.

  • The role, duties and responsibilities in the context of services to CBK customers (opening and administration of accounts, initiation and execution of payments) will be examined.

Public Relations and Financial Literacy

The Central Bank of the Republic of Kosovo exercises its activity in an autonomous and independent manner, respectively performs the tasks and fulfils the objectives defined by the Law. The independence and autonomy of the CBK, in accordance with the best institutional practices, requires a high level of transparency and accountability on its part.

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

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

This department currently has (12) twelve people engaged, including the Head of the Department.

Duties and Responsibilities of the Department

Also, this Department contributes to the maintenance and development of institutional relations with all financial system stakeholders.

  • Coordination and development of institutional relations with state institutions;

  • Coordination and development of communication with the media and the general public;

  • Coordination and development of communication and cooperation with foreign authorities and international organizations;

  • Contributing to maintaining and developing relations with financial institutions;

  • Supporting the CBK protocol and organizing CBK meetings and conferences;

  • Regular updating of the CBK website;

  • Coordination of reports and other activities of CBK in European integration processes;

  • Organization and direction of CBK's engagements in the field of financial literacy of the public;

  • Editing and proofreading various publications and materials as well as providing oral and written translation services between the Albanian, Serbian and English languages;

  • Taking care of important internal communications.

Financial Education and Public Communication Division

The duties of the Financial Education and Public Communication Division are:

  • Promotes, develops and supports educational initiatives related to economic issues;

  • Coordinates activities in the implementation of the CBK Program on financial education;

  • Prepares materials for implementation of the CBK Financial Education Program;

  • Cooperates with local and international institutions on issues and activities within the Financial Education Program;

  • 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 distribute educational information to the public;

  • Promotes economic and financial issues through different forms of communication;

  • Promotes and provides information on financial education on the financial education page on the CBK’s website;

  • Organizes and coordinates various educational and financial activities for students, young people, children and the general public;

  • Identifies groups for providing educational financial knowledge, including primary, secondary schools, universities, journalists, teachers and others;

  • Coordinates and advances communication and cooperation with institutions and corresponding counterpart offices in local institutions;

  • Organizes and maintains protocol of the CBK’s organizational activities;

  • Implements the Rules of the Foreign Relations Department;

  • Coordinates communication with external parties and constantly takes care to improve CBK's relations with the public;

  • Edits and proofreads various publications and materials of the CBK;

  • Edits , publishes and manages the CBK’s website, the CBK’s financial education page, publications on the intranet and all social networks of the CBK;

  • It is the bearer of all activities with the public.

European Integrations and Institutional Coordination Division

The tasks of the European Integrations and Institutional Coordination Division are:

  • Coordinates and reports issues related to European integration and Institutional Coordination, related to the responsibilities and duties of CBK;

  • European Integration and Institutional Coordination Division maintains regular contact with the relevant organizational units in CBK in order to address as efficiently as possible issues arising from the European integration process and international cooperation;

  • Coordinates contacts and reports with the Prime Minister's Office and other institutions related to the process of Kosovo's integration into the European Union;

  • Prepares reports and continuously summarizes information according to the requirements and procedures determined by the CBK;

  • Continuously monitors developments from the perspective of international cooperation with the main international financial institutions such as: the Central Banks of European countries, the International Monetary Fund, the EBRD, the World Bank, the ECB and other international institutions;

  • The European Integration and Institutional Coordination Division analyses annual reports of the European Commission on Kosovo's progress, highlights the recommendations made regarding the harmonization with the acquis communautaire and ensures there are completely addressed to the decision-making bodies in the CBK;

  • The European Integration and Institutional Coordination Division engages in the coordination of  relevant projects related to the European integration process for projects that provide various technical assistance, and reports to the supervisory authorities for these projects;

  • Engages as support to the management in meetings with the members of the European Commission, where the institutions is represented in reports for the main developments from the sphere of European Integrations and Institutional Coordination  in CBK.