MACROECONOMICAL ANALYSIS OF THE BANKING SECTOR AS KEY PART OF FINANCIAL SYSTEM OF MONTENEGRO DURING COVID CRYSIS 2020 – 2022 - International Scientific Journal Monte (ISJM)

Vojin Vlahovic, Deposit Protection fund, Montenegro

ABSTRACT

Financial markets have a great influence on the functioning of the economy as a whole. During the last decade, the economic environment has become extremely dynamic and risky, and the financial institutions exposed to risk are constantly working on the application of mechanisms of protection and preservation of stability. The post-Covid period and the looming energy crisis have influenced main financial institutions to seriously deal with the protection of the financial system of Montenegro. The dominant part of the financial market, over 90%, is made up of banks, through which most of the financial intermediation takes place. In this paper, we will deal with the analysis of the importance of the role of the financial system of Montenegro, with a special focus on the banking sector.

Keywords: financial system, financial markets, banking system in Montenegro

INTRODUCTION

The central bank has a significant role in preserving financial stability, which includes the healthy functioning of the financial system – financial intermediaries, financial markets and financial infrastructure, in order to facilitate not only the efficient allocation of financial resources and the normal functioning of the economy, but also special action in conditions of crises and imbalance in the market.

The development of the financial system has a great impact on economic activity, especially in the period of crisis, which requires greater control and regulation, strengthening of trust in the financial system, unhindered provision of financial services and risk protection. Therefore, it is important to continuously analyze and assess the impact of the macroeconomic environment on financial stability and analyze the functioning of key financial institutions, and act correctively and preventively by adjusting the financial framework, all with the aim of reducing the harmful consequences of crises.

Volume 9, No.1 (2024): April

ISSN 2661-2666 (Online) International Scientific Journal Monte (ISJM)
ISSN 2661-264X (Print)

DOI : 10.33807/monte.20243117

DOI URL: https://doi.org/10.33807/monte.20243117