Former Kosovan PM says pensions at risk after SVB, Credit Suisse crises

Former Kosovan PM says pensions at risk after SVB, Credit Suisse crises
/ Leonhard Niederwimmer via Pixabay
By Valentina Dimitrievska in Skopje March 20, 2023

Kosovo’s former prime minister and MP from the opposition Democratic League of Kosovo (LDK), Avdullah Hoti, said on March 20 that the absence of a board at Kosovo’s state-run Pension Saving Trust (FKPK) has left about €2.5bn of savings invested in financial markets at the “mercy of fate”. 

Hoti was referring to the potential crisis after the collapse of the US Silicon Valley Bank (SVB), which was the largest failure since the banking crisis in 2008.

He noted that the country’s Pension Saving Trust has been left without a board since March 1, 2023 and that citizens are already bearing the consequences of the failure to appoint a new board.

“The FKPK unit price is decreasing from March 3, 2023 onwards. This is happening because of several signals of a possible crisis in the financial markets, bankruptcies and bank failures in the US,” Hoti said in a Facebook post.

He added that in the absence of the board, there is no one to make a decision to withdraw the Pension Trust's investments from the financial markets where there is a decline.

The mandate of the members of the Pension Trust Board ended at the end of last November but it has been extended for another three months. A call for a new board was announced in early December but so far no action has been taken. 

“In addition, in the absence of the board, the savings collected by the Trust during these months will not be able to be invested in financial markets,” Hoti said.