At the invitation of the Governor of the Central Bank of Cyprus, Mr Athanasios Orphanides, Governors or their representatives from the Central Banks of Albania, Bosnia & Herzegovina, Bulgaria, Cyprus, Former Yugoslav Republic of Macedonia, Greece, Montenegro, Romania and Serbia, as well as a representative from the Banking Agency of the Federation of Bosnia & Herzegovina, met in Limassol on 25 February 2011.

The meeting was held within the framework of the multilateral Memorandum of Understanding originally signed in Athens in July 2007 which aims at further advancing cooperation in the fields of banking supervision and financial stability.

The first session of the meeting focused on the recent macroeconomic and financial developments in South Eastern European countries and the current outlook and condition of the banking system. Participants noted that, despite the challenging international environment, there are signs of recovery and gradual growth in most countries of South Eastern Europe. Participants also noted that prudential measures have been taken by supervisory authorities that contributed towards further strengthening the soundness of the region’s banking system and enhancing financial stability.

During the second session of the meeting, the participants endorsed a framework for the exchange of information, on a regular basis, regarding cross border banking groups operating in South Eastern European countries. According to the framework, a permanent mechanism is established, among the banking supervisory authorities of South Eastern European countries, which will facilitate the periodic exchange of information and promote a better understanding of the risks faced by banks with cross border presence in the region. It will also allow the identification of possible differences in national supervisory rules and practices and enhance supervisory cooperation.

Finally, it was agreed that the next meeting will take place in Albania in 2012.