IMF:'No serious threat to Azerbaijan's banking sector'

Assessment of the Azerbaijani financial system will be implemented at the end of this year to early next year in the frame of the planned renovation of the joint programme of the International Monetary Fund and World Bank to assess the stability of the financial sector of the country, the deputy director of the IMF Middle East and Central Asia Department (MCD), Nadeem Ilahi said at a press conference in Baku.

"The study will involve experts from both organisations. Discussion with the Central Bank of Azerbaijan, private banks and with the government of the country will be held. This evaluation can be a good base for reform in this area," Ilahi said.

Ilahi noted that the mission also discussed the problems in the banking system with the CBA.
"We continue to recommend professional regulation of the banking sector to the CBA. Regular monitoring is also required. This area is a priority for the government today and we see no serious issues that can create problems for the system," Ilahi said.

The IMF and World Bank conducted the first evaluation within this programme in 2003. After the first evaluation the laws for banks, the National Bank and several regulations were adopted. The adoption of these laws eliminated deficiencies identified in the FSAP assessment on the first round.

The WB and IMF experts conducted stress tests within the Azerbaijani financial sector assessment programme and found they revealed a high capacity of the banking system to withstand the risks to reduce the total indices. They showed that if the indices reduce by 50-70 per cent, the banking system will not fall to a zero level and its assets will exceed liabilities. This is a very good index.


/Trend/