European Commission: Maintaining BEC independence

This report praises Kosovo's achievements in all areas, including achievements in the area of the economy, as well as the actions and decisions the Central Bank of the Republic of Kosovo (BQK) has made to preserve the financial system by managing the pandemic period that had hit finance in many countries.

On page 65 in the report, it writes that the financial sector remained stable and supported by strong economic growth. “In the second half of 2021, with the pace of economic recovery rising, the Central Bank of Kosovo took measures that were related to pandemic”, the European Commission report wrote.

The report also stresses that the independence of the Central Bank of Kosovo should be ensured by improved professionalism and overcoming political influences in appointments.

The Bank's “Bord Supervisor became operational once again by appointing two new members, allowing a quorum to be restored. A fifth non-ekzekuitive member was later appointed to improve the performance of the board. More effort is needed, and it needs to make sure that principles of transparency and credit-based selection processes are applied. Any political impact on appointments within the Bank violates public confidence in this service”, the report says.

According to the report, the Central Bank of Kosovo is Kosovo's only authority to promote and preserve the stability of the financial system and contribute to maintaining price stability.

Kosovo Central Bank and the Constitution of Kosovo impose functional and institutional independence of the Central Bank. The Central Bank law provides independence and prohibits the Central Bank's decision-making bodies from providing and receiving instruction and requires influence by public authorities. The Kosovo Assembly appoints members of the Bank Board based on credit, professionalism and their ability to carry out their duties independently and without political interference. The Bank still needs to implement reforms concerning its corporate governance structure in order to improve its accountability and transparency in long-term”, the report says.

“The transparency parameters and credit-based selection processes are important for the institution's integrity and any political impact on the appointments within the Bank undermine public confidence in this institution. The Central Bank must ensure that its essential functions, including financial stability and bank supervision, are adequately equipped. Changes to the Central Bank Law are required to ensure compliance with EU legislation. Under the Law for Central Bank, public sector monetary financing is prohibited and the public sector does not have privileged access to financial institutions”, the report said.