In response to some media updates on Moody’s report classifying Reiffeisen bank and other banks operating in Serbia as “vulnerable”, the National Bank would like to highlight that the report explicitly states that East European countries differ in terms of vulnerability and enumerates those most vulnerable without including Serbia.

Further, the report focuses on banking groups with the strongest exposure in Eastern Europe, but does not give risk estimate for any of these groups.

Moody’s report is in fact an analysis and assessment of links between West and East European banking systems, including mechanisms through which the current crisis is spilling over from one system to the other, and the possible impact of the crisis on bank ratings assigned by the agency.

The analysis itself does not shed any new light on the portrayal of the current situation whose possible repercussions are discussed at different levels, and in respect of which various initiatives and measures have been undertaken.

The NBS would like to underscore that there is no reason for clients of any bank operating in Serbia to “fret about their deposits and the safety of transactions”.

Despite withdrawal of the substantial amount of savings in October 2008, which would be a particular challenge to any bank in the world, our banking system has remained highly liquid (with around 30% of liquid assets) and solvent (with around 23% capital adequacy ratio).

Furthermore, since the first spillover effects of the global crisis were felt in Serbia, the NBS has improved daily monitoring of liquidity and monthly monitoring of the quality of bank assets.Communication with home country supervisors and bank owners has also been bolstered – operating strategies of their bank daughters in Serbia are discussed, as well as their readiness to extend support if necessary.

The NBS would like to reiterate that inadequate and unprofessional presentation of reports in foreign media about the financial sector can undermine the trust that this sector is based on. Moreover, media people should assume maximum responsibility for the damage that such unprofessional writing may cause.