TBILISI, DFWatch–Georgia’s Constitutional Court has suspended the work of a newly created agency that was to take over the supervision of private banks; previously the responsibility of the National Bank.
The ruling was made during a lawsuit against the parliament filed by 39 members of parliament from the National Movement and Free Democrats. The court agreed to hear the case, which means that the authority of the new body will be suspended until a final decision has been made.
The MPs behind the lawsuit are against a set of amendments to a number of laws which transferred functions from the National Bank to the new Financial Supervisory Agency, which is subordinate to the government. The reasoning behind the suit is that it is crucial for the stability of the financial sector to leave the supervising functions with the National Bank.
In a brief statement, the court writes that allowing the enforcement of the amendments before the lawsuit is over could harm the stability of the financial sector and cause undesirable results for certain persons, like investors or depositors.
The government initiative to create a new body separated from the National Bank came in the midst of a currency crisis and a rapid drop in the value of the Georgian lari. The decision was criticized by international finance organizations and financial experts. The president initially vetoed the bill, but signed it into law after the majority in parliament overturned his veto once. Margvelashvili was still against the bill, but also underlined that it didn’t violate any basic, fundamental values.