Republic of Armenia: Financial Sector Assessment Program-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Armenia

December 12, 2018

Preview Citation

Format: Chicago

Republic of Armenia: Financial Sector Assessment Program-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Armenia, (USA: International Monetary Fund, 2018) accessed September 19, 2024

Summary

The Armenian banking sector is recovering from the 2014 economic slowdown, aided by additional capital injected by shareholders, several mergers, and improved regulation and supervision. However, banks, including the largest ones, are vulnerable to external shocks because high levels of dollarization expose them to FX-related credit and liquidity risks. These risks can be mitigated with the adoption of a stressed debt service to income ratio limit, the gradual introduction of reserve requirements in foreign currency for liabilities denominated in foreign currency, and the adoption of the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) in domestic currency and in United States dollars (USD). The introduction of the capital surcharge for domestic systemically important banks is also needed.

Subject: Banking, Currencies, Financial institutions, Financial Sector Assessment Program, Financial sector policy and analysis, Foreign exchange, Loans, Money, Nonperforming loans

Keywords: Basel III minimum, Basel III requirements, Basel III standard, CBA, CR, Currencies, Financial Sector Assessment Program, Financing, Global, ISCR, Loans, Middle East, Nonperforming loans, NSFR Basel III liquidity ratios, U.S. dollar

Publication Details

Pages:

66
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2018/361
Stock No:

1ARMEA2018001
ISBN:

9781484389737
ISSN:

1934-7685

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