Decision on Determining When Sale or Monetization of Assets, Rights or Liabilities of a Resolved Bank or Bridge Institution in Bankruptcy Would Adversely Affect the Financial Market

Pursuant to Article 47 paragraph 1 item 6 of the Law on the National Bank of the Republic of North Macedonia (Official Gazette of the Republic of North Macedonia No. 158/10, 123/12, 43/14, 153/15, 6/16 and 83/18 and Official Gazette of the Republic of North Macedonia No. 110/21, 74/24 and 16/25) and Article 30 paragraph 15 of the Bank Resolution Law (Official Gazette of the Republic of North Macedonia No. 209/23), the National Bank of the Republic of North Macedonia Council has adopted the following DECISION on determining the conditions when it is considered that the market situation is such that the sale or monetization of the assets, rights or liabilities of the bank that is being resolved or of the bridge institution in bankruptcy proceedings would adversely affect the financial market
I. GENERAL PROVISIONS

1. This Decision shall lay down the conditions that the National Bank of the Republic
   of North Macedonia (hereinafter: the National Bank) considers when determining whether the market situation is such that the sale or monetization of the assets, rights or liabilities of the bank under resolution or of the bridge institution (hereinafter: the assets, rights and liabilities) in bankruptcy proceedings would adversely affect the financial market. The assessment from paragraph 1 of this item shall include an assessment of the market situation for the respective assets or liabilities, as well as the impact of their sale or monetization on the markets in which they are traded and on financial stability. Deterioration in asset quality or market dysfunction should not be considered sufficient conditions to conclude that the sale or monetization of assets, rights or liabilities in bankruptcy proceedings would adversely affect the financial market.
2. The terms used in this Decision shall have the meaning established by the Bank
   Resolution Law (hereinafter: the Law), the Banking Law and the by-laws adopted on the basis of these laws.
   II. ASSESSMENT OF THE ADVERSE IMPACT OF THE SALE OR MONETIZATION OF
   THE ASSETS, RIGHTS OR LIABILITIES ON THE FINANCIAL MARKETS
3. For the purposes of item 1 of this Decision, the National Bank shall evaluate at
   least the following elements:
   − whether the market situation for the assets or liabilities is disturbed, considering the indicators from item 5 of this Decision; − the impact of the sale or monetization of assets, rights or liabilities on the markets where they are traded, considering the indicators from item 6 of this Decision, and − the state of the financial markets and the direct or indirect impact of the sale or monetization of assets, rights and liabilities, considering the indicators from item 7 of this Decision.

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4. In addition to the elements from item 3 of this Decision, the National Bank may
also take into consideration other additional elements that it considers significant in determining whether, in the given market situation, the sale or monetization of assets, rights or liabilities in bankruptcy proceedings would adversely affect the financial market.
5. The National Bank shall determine whether the market situation for the assets or
liabilities is disturbed, taking into consideration the following indicators:
− the liquidity of the markets for the relevant assets or for a group of similar financial assets; − whether the corresponding assets or group of similar financial assets are classified as impaired for accounting purposes and whether the bank has determined an impairment, i.e. allocated a special reserve for these assets; − realized losses and the variability in cash flows arising from these assets; − the decrease in the value of assets or negative movements in the prices of instruments held to protect the value of these assets or the prices of a group of similar financial assets; − the high degree of price volatility compared to price changes in the market as a whole, especially the existence of unusually high price differences between different markets that normally show the same price movements; − the reduction of share prices and the deterioration of the credit rating and refinancing conditions of market participants who hold a significant amount of these assets, compared to other market participants.
6. The National Bank shall determine the impact of the sale or monetization of assets,
rights or liabilities on the markets where they are traded, taking into account the following indicators:
− the size of the markets where the assets or liabilities are traded and the number of potential purchasers; − the impact that the sale or monetization of the assets is expected to have on the prices of a group of similar financial assets, and − the time period that would be required for the sale or monetization of the assets in bankruptcy proceedings, including a possible accelerated forced sale.
7. When assessing the situation in the financial markets and the direct or indirect
impact of the sale or monetization of assets, rights or liabilities, the National Bank shall considers the following indicators:
7.1. The risk of a financial crisis, taking into account:
− the number, size or significance of banks that are exposed to the risk of meeting the conditions for early intervention or for opening bankruptcy proceedings set out in the Banking Law or the resolution conditions set out in the Law, or − the need to use extraordinary public financial assistance or to use emergency liquidity assistance;
7.2. Whether the sale of the assets or the disruption of markets could cause contagion
to the financial system, particularly where other market participants hold a significant amount of those assets or a group of similar financial assets or where those assets are presented according to their market value;
7.3. A decrease in the amount or increase in the price of short-term or medium-term
funding sources available to market participants, and

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7.4. Disruption of the functioning of the interbank money market, which is determined
at least through:
− increasing the additional coverage required in this market; − rating downgrade of market participants or − reducing the availability of the collateral that can be used in this market.
III. FINAL PROVISIONS
8. This Decision shall enter into force on the eighth day from the date of its publication
in the Official Gazette of the Republic of North Macedonia, and shall apply from 13 October 2025. D. No. 2-10864/9 Governor and Chairman 27 March 2025 of the Council of the National Bank Skopje of the Republic of North Macedonia Anita Angelovska-Bezhoska