Anita Angelovska Bezhoska: Speech at the Ministerial Dialogue on the Economic Reform Programmes of the Candidate Countries Speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the Ministerial Dialogue on the Economic Reform Programmes of the Candidate Countries, Brussels, 17 May 2019. * * * Dear Ministers, Dear representatives of the European Commission, European Central Bank and Eurostat, It is always a great pleasure to be part of the regular Ministerial Dialogue, having the opportunity to reflect on important issues that are in the spotlight of the economic agenda. At the same time it as an excellent occasion to express our appreciation on the provided assessments of the Economic Reform Programme. The main takeaways from these assessments have been important guidelines, mapping our policy actions, enhancing our capacity, and providing for faster closure of the existent gaps. Now, let me briefly reflect on the topic of Structural reforms for attracting foreign direct investment and increase resilience. There is no doubt that investments are one of the key ingredients for increasing the long-term potential of an economy. When it comes to emerging economies, commonly there is a need for additional cross – border capital, which can complement the insufficient domestic saving. The more these flows are comprised of FDIs, the higher the positive impact on productivity and competiveness. In the regional context, pre-crisis investments were an important growth driver, reaching close to 30% of GDP, while in the postcrisis period investment ratios has plunged.

If a settlement bank encounters difficulties and there are no back-up solutions, there will be a risk of widespread disruption of the payment system. This risk can be reduced through good back-up systems. Second-tier banks have recently improved their back-up solutions. Most banks have an account at Norges Bank. In the course of 2013, all 106 of the second-tier banks with an account at Norges Bank have submitted authorisations permitting the bank to be moved up automatically to first-tier level if the settlement bank should fail, enabling them if necessary to participate in net settlements at Norges Bank directly at short notice. This makes second-tier banks and the settlement system as a whole less dependent on the private settlement banks. The authorisations have strengthened financial stability. Banks participating directly in net settlements are required to have sufficient cover for their clearing positions. Satisfying this requirement is the banks’ own responsibility. They can do this by either depositing funds at Norges Bank or pledging approved securities in favour of Norges Bank. Our analyses show that the great majority of second-tier banks have sufficient liquidity in Norges Bank’s settlement system to be able to participate directly in the net settlements. However, clearing positions can vary widely. Banks participating directly in the settlements over time must maintain sound liquidity management. Conclusion Allow me to conclude by highlighting that new and improved regulation of banks will help to reduce the likelihood of deep financial crises.