Montenegro: Financial Sector Policy Based Guarantee
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                            SUMMARY OF DISCUSSION

                          Meeting of the Executive Directors

                                      June 28, 2012


       The Executive Directors approved the Financial Sector Policy Based Guarantee to
Montenegro in the amount of EUR 60 million (USD 79.2 million equivalent) on the
terms and conditions set out in the President’s Memorandum (R2012-0127).

        Directors expressed support for the Financial Sector Policy Based Guarantee,
which supports reforms to strengthen systemic risk monitoring and the crisis management
framework, address banking sector vulnerabilities, complete restructuring of Prva Banka,
enhance depositors’ confidence, and further improve the regulatory framework for banks.
They acknowledged that the Policy Based Guarantee will assist the country in its efforts
to continue accessing international capital markets, diversify its borrowing portfolio, and
raise funds on more competitive terms as well as support the country’s integration efforts
into the European Union. Directors noted that in spite of the enduring Eurozone
vulnerabilities and severe 2012 winter, the Government has maintained an adequate
macroeconomic framework and continued its structural reforms. Directors noted the
slowdown in the country’s economic growth and high financing needs and welcomed
further collaboration between the Bank, European Union and other development partners.




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This summary is not an approved record.