Skopje, 22 July 2022 (MIA) – Over the years, the National Bank has been a pillar in preserving financial stability, which is essential to economic growth. In current conditions of distinct macroeconomic risks, the local banking system is stable and has the capacity for proper credit support of economic growth, heard a meeting between the NB team led by governor Anita Angelovska-Bezhoska, and Jasmin Chakeri, manager of the Sector for Macroeconomics, Trade and Investment for the Europe and Asia branches of the World Bank, Massimiliano Paolucci, director of the North Macedonia and Kosovo Office and senior economict Sanja Madzarevic-Sujster. The new regulations, prepared in accordance with European practices, strengthen the framework and leading role of the National Bank in making and carrying out macro-prudent policies. In the context of our achievements so far, we concluded that the solvency of the banking system is stable and solid, with a capital adequacy ratio of 17%. Liquidity indicators remain satisfactory and they show that the banks are adequately managing the liquidity risk. The credit portfolio quality of banks remains solid, and the 3.1% of participation of nonfunctional credits in the overall credits of the non-financial sector attests to this. These solid achievements are certainly the result of the regulatory framework by the National Bank. Additionally, in accordance with the decision by the EC, the banking regulation and supervision conducted by the NB has been judged to be in accordance with EU standards, the central bank said in a press release. They also discussed new legal solutions which go in favor of strengthening the mechanisms for maintaining financial stability, i.e. the Law on Financial Stability and the Law on Banks. The World Bank team highlighted the importance of the solutions that will give a wider mandate to the central bank to stop certain systemic risks in the banking sector. The Law on Financial Stability, which is in Parliament procedure, will legally regulate the Financial Stability Committee as a macro-prudent body which will strengthen the coordination of financial regulators when determining systemic risks and synchronized taking of macro-prudent measures. The World Bank emphasized that the timely and appropriate adjustment of policies, in accordance with current expectations and future projections, is of great importance. Policy makers at this moment, when there is an upward movement of prices due to the military conflict, are faced with the need for monetary tightening. At the same time, it is particularly important for monetary policy not to cause a negative impact on economic growth when choosing measures to stop inflation. In that context, the National Bank successfully responds to current challenges and cautiously applies measures to maintain stability, reads the press release. dk/ik/