Montenegro:
A controversial change of CBCG Governor
Overview:
The government in Montenegro has adopted a new Law on the Central Bank. Once this is approved by parliament, the current governor will be removed before his current term expires. While the new Law itself is not controversial, its implementation in this way looks like political interference in the work of the central bank. This is especially so given the long-running dispute between Governor Krgovic and the government over the status of Prva Banka. The bank required a large government loan to stabilise its operations during the financial crisis and, in return, had restrictions on it operations imposed by the central bank. The bail-out of a bank with very strong political connections was in itself controversial. Now disagreement about whether the bank is ready to lend freely may cost the Governor his job.