The Committee on Economy, Finance, and Budget has finished the consultative hearings for Tamara Backović, Mladen Bojanić, and Zarija Pejović, who have been nominated as members of the Council of the Central Bank of Montenegro (CBCG).

This marks the conclusion of the Committee session, while Brankica Mosurović has withdrawn her candidacy in the meantime. Hearings for Srđan Milić, Šućo Orahovac, Hadži Vesna Vujošević, and Ismet Hadžić are scheduled for tomorrow’s session.

MP Tonći Janović from the Europe Now Movement asked Backović if she would support enhanced integration of the Central Bank of Montenegro into the European supervisory framework. The Civic Movement URA inquired about their motivations for accepting the candidacy and their first steps if elected.

The Socialist People’s Party questioned the significant disparity between passive and active interest rates and how it can be addressed, as well as whether the regulatory framework needs revision. The Committee Chairman, Boris Mugoša, asked Backović about the Law on the Development Bank, specifically how it would operate outside the licensing and supervision system of the Central Bank of Montenegro. He queried Bojanić regarding institutional independence and his response to potential political influence, while Pejović was asked about recommendations for inflation reduction…

The Council comprises eight members – the Governor, three Vice-Governors, and four members unaffiliated with the Central Bank of Montenegro, appointed by the Assembly. Council members serve a six-year term and may be reappointed for one additional consecutive term. The candidates discussed belong to the group not employed by the Central Bank.

Policies are made without supporting research

Tamara Backović stated she is an assistant professor at the Department of Quantitative Economics and serves as the Vice-Dean for Accreditation and Quality Management at the Faculty of Economics. She highlighted her two decades of experience in teaching, scientific research, managing international projects, and developing empirical analyses…

According to her, research is being conducted at the university, but the recommendations generated often go unnoticed and are not utilized in practice.

“A critical issue is that public policies and strategies are often developed without empirical research backing them. Consequently, we act and then react to the ramifications. This was my motivation to apply; I believe my skills could help avert such situations in the future,” Backović asserted.

She indicated that low deposit interest rates are a byproduct of the need to avoid limiting economic activity. The increased liquidity in the banking system keeps rates down, compounded by a lack of competition in this market, necessitating long-term sustainable strategies.

“I would champion transparency, openness, alignment with EU standards, and further the role of the Central Bank of Montenegro in maintaining the country’s financial stability and integrity,” Backović mentioned.

Long-term strategy essential

Mladen Bojanić, a former Minister of Capital Investments and candidate, highlighted his thirty years of experience in finance and economics, noting his previous role as a chargé d’affaires at the embassy in Abu Dhabi.

Bojanić pointed out that the Montenegrin financial system is confronting several significant challenges, including debt repayment and anticipated infrastructure investments, suggesting that loan maturity periods would likely be extended and new debts distributed over several years.

“Everything hinges on tourism, and while we may manage through short-term solutions, a long-term strategy is imperative. Moreover, our dire trade deficit, standing at only ten percent coverage of imports by exports, exacerbates this issue,” Bojanić elaborated.

Zarija Pejović, Vice-Dean for Education at the Faculty of Economics of the Mediterranean University, remarked that the capitalization of banks should increase in proportion to deposits, thereby incentivizing them to enhance lending activity and reducing interest rates. He stressed the need to remove barriers for foreign banks entering the domestic market to foster competition and improve services for citizens.

He maintained that an oligopoly exists, leading to price-fixing in markets that inflates costs through excessive margins.

“If appointed to the Council, I will advocate for establishing an Entrepreneurship Development Fund. I propose offering individuals grants of up to 100,000 euros to diversify the economy and promote the creation of small, medium, and eventually larger enterprises,” he stated, adding that the Development Bank should be reestablished under the control of the Central Bank of Montenegro.

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