Azerbaijan, Baku, 24 October /corr. Trend N.Ismaylova / The financial sector of Azerbaijan sufficiently developed, and today the assets of the banking sector of Azerbaijan exceeds the non-oil GDP by 60%, said at the international banking conference of the CIS participating countries 'Financial markets of CIS: development and integration' in Baku.
"The development dynamic of the banking sector preceded the whole period of the radical transformations. The banking sector became one of the leading sectors of reformation of the national economy for the period of independence due to creation of contemporary financial construction and acceleration of institutionalization," Rustamov said.
He said that under swift growth, the assets of the banks begin working in new or familiar sectors where the system of risk management has been devised sufficiently. Therefore, unbalanced growth is the call for the financial stability, especially when the growth continues in the conditions of worsening of situation in the world economy.
"In this situation, the NBA intensively starts up actions to establish pillow of security to strengthen financial sustainability of the banks. The activity of the NBA, as a regulator, was established based on the principles of healthy conservatism," Rustamov said.
The NBA toughen up the requirements for the quality of assets, and also for security of credits, increased the requirements for the creation of reserves of the assets, which were established at the level of 14%, to the adequacy of the capital. Under the conditions of the global crisis of liquidity, the requirements increased for the system of control on not only current, but also long-term liquidity of banks, taking into account active borrowings of banks from the international markets beginning from the end of 2006.
The NBA took a number of the warning regulating measures to prevent excessive external borrowings. At the same time, consultations are conducted with the banks to motivate banks for more weighed and prudent situation in the market, and also improve control systems of the risks of corporate governance. Under the present conditions, the NBA carries out more substantial control, aimed at the more depth analysis of the situation both in the separately undertaken bank, and as a whole, in the economy, with onward realization of preventive actions.
As a result, the banking sector of Azerbaijan is less subjected to global financial crisis. Today the foreign debt of the banks
is only 18% of the joint liabilities. The structure of both assets and liabilities
was sufficiently diversified, which makes it possible for the system to
function in a stable regime.
The quality of assets causes no fears, since the share of the inoperative
credits is 2.5% of general credit portfolio.
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