meta_id 3024175

On 27 February 2026, the Council of the Central Bank of Montenegro passed a decision establishing the method of calculating capital adequacy at the level of financial conglomerates where credit institutions are the most important component, alongside financial institutions, ancillary service undertakings, and leasing companies. The decision prescribes rules for own funds calculation, including the elimination of multiple recognition of capital within groups and restrictions on including own funds that cannot be freely transferred between conglomerate entities. Own funds recognised in the banking sector cannot include Common Equity Tier 1, Additional Tier 1, or Tier 2 items as defined under credit institution capital adequacy regulations, and such items may only be used to cover banking sector risks. The decision establishes that where a deficit of own funds exists at conglomerate level, only items eligible under both banking and insurance sector regulations may be used to address it. The decision prescribes three calculation methods for supplementary capital requirements: the accounting consolidation method, based on consolidated financial statements; the deduction and aggregation method, based on individual entity financial statements; and a combined method, which the Central Bank may approve only where applying the other methods is not reasonably feasible or where certain entities are of negligible supervisory interest. All entities must apply their selected method consistently unless the Central Bank approves otherwise. The Central Bank, as competent coordinator, retains authority to verify application of these methods and require corrections for irregularities or inconsistencies. The decision entered into force on 7 March 2026, eight days following its publication in the Official Gazette of Montenegro. REFERENCES: Central Bank of Montenegro Council Decision no. 0101-1771-9/2026 (27 February 2026)