In late 2014, an estimated $1bn went missing from the Moldovan banking system. The scale of the fraud would have been large in most countries, but in Moldova, which has a population of just 3.5 million, it was staggering. It amounted to roughly one-eighth of the former Soviet republic’s gross domestic product.
In the aftermath, three of the largest banks in the country ceased to exist, political crises ensued, and the economy suffered. A bailout from the government, worth an estimated $870m, was required to rescue depositors, leading to a rapid depreciation of the national currency. Meanwhile, the governor of the national bank was forced to raise the basic bank rate five times in quick succession, from 4.5% to 19.5%, in order to keep money in the system. Moldova’s economic activity contracted in 2015, though only by 0.5%, with trust in the banking and political systems of the country heavily eroded.
