Although Moldova has made some importantadvances since the 2008 FSAP update, risks to banking sectorstability have become severe. There is an urgent need,therefore, to improve transparency and governance in thebanking system. Although the banking sector appears to bewell capitalized and liquid, important pockets of weaknessremain and vulnerabilities may be masked by fraud ormisreporting. The two securities settlement systems are inneed of updating, though plans to take this reform forwardare not finalized. Weaknesses in the insolvency and creditoror debtor regime create uncertainty and may deter somestakeholders from engaging in financial transactions.Especially in light of the weaknesses described above andrecent geopolitical uncertainties, urgent action is neededto address these and mitigate the risks to which thefinancial system appears to be exposed.
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