16:43 - 31.10.2019

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October 31, Fineko/abc.az. The Financial Markets Supervision Authority (FIMSA) has endorsed certain amendments to the Rules of Calculating Bank's Capital & its Adequacy.

ABC.AZ reports that when commenting on the amended Rules, Vugar Bayramov, the chairman of the Center for Economic & Social Development, pointed out that the organization of regulation in this format will reduce for the banks the attractiveness to give consumer loans compared with business loans.

According to Bayramov, as a result, the growth rate of consumer loans will weaken, and the debt of the population will be limited.

"This could make banks more interested in financing the real sector," expert said.

He also stressed that the Rules also contain changes relating to bringing the regulatory framework in line with international standards.

"Thus, new standard BASEL II on credit risks will be fully integrated, and the ratings of international rating agencies will be classified on the basis of sovereign and corporate securities based on risk assessment.

However, in order to apply the Basel II and III principles, a capital buffer against market and operational risks has been added to the Rules. Realization of such requirements serves to improve prudential regulation up to the international level, increase the stability of the banking sector to credit risks, as well as to market and operational risks."