Central Bank of Azerbaijan calls upon local banks to correct their risk management strategies

The Central Bank of Azerbaijan (CBA) calls upon the local banks to correct their risk management strategies, CBA Director General Rashad Orujov said Saturday in Baku at a forum titled "Risk management in banks in post-crisis period".

The forum is organized by Azerbaijan Bank Training Center (ABTC) and the Central Eurasian Banking Federation.

"In the last three to four years, the word "risk" has become the most commonly used, however, it is very difficult to recognize and manage the risks during uncertain market conditions. Azerbaijani banking sector was able to maintain its stability in an uncertain period. And now we are setting new and more complex targets," said Orujov.

According to him, the main catalyst of the crisis is the pro-cyclical growth, excessive credit debt and the concentration of loans in sectors with a high degree of risk.

"The main tendency in the behavior of banks should be the balance between risk and incomes. In the future, we expect the banks to review the strategy of risk management and correct it in accordance with the experience gained during the global economic crisis," he said.

Another important issue facing the banks is to create a supportive environment of corporate governance, communication systems, increase investment in human capital, said Orujov.

The forum was held within the U.S Agency for International Development (USAID) "Partners for Financial Stability". It was aimed to discuss tendencies and challenges in risk management in the post-crisis period and to exchange information with the heads of banks.

Director of the Azerbaijan Bank Training Center Javanshir Abdullayev, Bank Polski chief administrator Christoph Dresler and the chief executive administrator John Dorland will made presentations at the forum.

The forum was designed for chairmen and members of the supervisory board, the board of directors, management and the audit committee of banks in the region, as well as directors general and senior risk managers.


/Trend/