BAKU, Azerbaijan, December 20. The Central Bank of Azerbaijan (CBA) has approved the "Policy concept on implementing risk-based supervision" as part of a joint project with the World Bank titled "Modernization of the financial sector," Trend reports via the CBA.
This concept aims to create an effective supervisory system in the financial sector in line with best international practices, ultimately helping to minimize systemic risks in the financial sphere.
Moreover, the document will facilitate communication between the CBA and both local and international communities regarding the new approach to supervision.
A risk-based supervision system, ARAS (Azerbaijan Risk Assessment System), covering early detection of risks associated with the activities of supervised entities, their evaluation, and assessment of risk management processes, as well as the implementation of a proportional and preventive supervisory regime, has been developed within the concept.
The document conceptually covers the period of risk-based supervision, defining the organizational structure of the supervisory process, including the functions of the Supervisory Committee and other structures.
The committee will carry out functions such as approving supervisory instructions, forming well-founded judgments, reviewing supervisory practices, and presenting annual supervisory plans and priorities for consideration by the board.
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