Azerbaijan to introduce “Baku Approach” for supporting financial sector
Baku, Azerbaijan, Nov. 23
The Financial Market Supervisory Authority (FIMSA) of Azerbaijan is completing work on creating the “Baku Approach” concept to support the development of the financial market, FIMSA Executive Director Ibrahim Alishov said at the second Banking Forum in Baku on Nov. 23.
Alishov noted that the concept is being developed by analogy of the well-known “Istanbul approach”, which helped Turkey to overcome the banking crisis in the early 2000s.
The “Istanbul approach” was introduced in 2002-2005. As part of this project, 318 companies, including 217 big firms, were able to restructure their credit debts and receive additional financing. As a result, Turkey managed to overcome the economic crisis that began in 2001.
During this period, continued Alishov, FIMSA conducted diagnostics in every bank of the country, checked the quality of their assets and formed a special capitalization program.
“As part of these measures, in total, five banks were closed, which were unable to raise their capital, and Bank Standard was among them. In total, we closed 11 banks during a year. This [economic crisis] affected not only the banking sector, but also other sectors. Thus, we closed six insurance companies, 33 credit unions and one non-bank credit institution,” added FIMSA executive director.
He noted that today there are positive trends in the banking sector.
“It is encouraging that the banks prioritized the issue of cost optimization. Another positive factor is that the number of bank employees increased by 245 people in the third quarter of 2017. After two devaluations, this is the first positive trend associated with the number of employees in this sector,” added Alishov.