Baku, Azerbaijan, Mar. 19
By Sara Israfilbayova – Trend:
The quality of corporate governance in banks of the member states of the Commonwealth of Independent States (CIS) is generally lower than in banks in other regions, which has a negative impact on their credit profiles, says a recent report by the Moody’s international rating agency, Trend reports.
According to the report, regulators in the CIS have withdrawn some banks' licenses because of fraud and losses caused by large related-party exposures and weak risk management. Moreover, regulators in some CIS countries have been taking steps to tighten supervision, improve reporting or reduce related-party lending.
Fraud and financial weaknesses caused by poor governance have caused some banks to close, the report states.
According to the agency analysts, key-person and related-party risks are greater in the CIS than elsewhere.