BAKU, Azerbaijan, Nov. 1
By Eldar Janashvili - Trend:
Azerbaijan’s Financial Market Supervisory Authority (FIMSA) plans to apply a liquidity coverage ratio (LCR) in the direction of liquidity risk management as part of transition to Basel III standards, a source in FIMSA told Trend Nov. 1.
In line with Basel III standards, certain steps have already been taken, according to the source.
Thus, the system envisaged in Basel III takes a differentiated approach to the banks of importance to the system. Presently, the minimum regulatory requirements for capital adequacy and financial leverage ratio in such banks are different from others. At the same time, the calculation of the countercyclical capital buffer is also taken into account.
Basel III standards put forward requirements for the implementation of goals, such as increasing banks’ resilience to economic and financial shocks, improving the risk management process and increasing the transparency of banks and the parameters for disclosure of information to the public, ensuring the stability of bank capital, as well as determining ratios for minimum liquidity of banks.
Application of the above mentioned requirements creates conditions for the stability of the banking system, development of an effective risk management system and the stability of banks and the financial system as a whole.