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Weekly economic review (Nov.12-16)

Analysis Materials 19 November 2012 11:30 (UTC +04:00)

V Baku International Banking Conference of CIS member states on 'Financial markets of the CIS: new opportunities and global risks' was held last week.

Chairman of the executive committee, CIS Executive Secretary Sergei Lebedev said that a positive trend has been observed in the CIS general activity for the past two years. Moreover, Azerbaijan's active position promotes the CIS countries' activity. "At present, the issue of establishing a single financial centre for the CIS countries is being discussed," Lebedev said.

He added that the financial centre is planned to be established in Moscow.

The creation of an international financial center, which will become a regional center, is possible in Baku, chairman of the Coordination Council of the Financial and Banking Council of CIS Anatoly Kazakov said. "We look forward to the creation of such a center in Baku and we hope that its work will be in contact with Moscow, Kiev and Almaty Financial Centers in the future," Kazakov said. He noted that the task of the CIS is to create an international financial center in the Commonwealth, which will become one of the most powerful in the world later.

As Secretary General of the Banking Association for Central and Eastern Europe Istvan Lengyel said, taking into the existing risks, the number of small banks must be reduced, thus increasing the number of financial markets and funds.

"This process can be carried out through the consolidation of banks, that is, their enlargement, as well as by increasing the requirements for the banks' capitalization," he said.

Tightening of the requirements for the capitalisation of banks by the Central Bank of Azerbaijan (CBA), capital requirement increased fivefold in 2014 - to 50 million manat, makes the country's market attractive for the CIS banks. As the CEO of CBA, Rashad Orujov told reporters on Thursday the banks have already started negotiations on the consolidation.

"Negotiations are underway in various combinations between different banks. Of course, no one would disclose the plans at this stage. We are waiting for the results. This is not an easy process. This decision will lead to considerable changes in the market, "Orujov said.

The International Bank of Azerbaijan (IBA) has played a role in developing relations between the economic entities of the CIS countries, IBA board chairman Jahangir Hajiyev said at the opening ceremony.

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