Russian Federation: Financial System Stability Assessment

IMF Staff Country Reports, July 13, 2016

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Russian Federation: Financial System Stability Assessment

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Bibliographic details

• Published: July 13, 2016
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781498363068.002

Executive summary

• The Russian banking system is weak and likely to need additional capital.
• Even in the baseline scenario, certain banks will need new capital owing to low profitability and increasing credit losses.
• The required resources increase in the stress scenarios, but remain manageable.
• Bank regulation and supervision have greatly improved in recent years, but further work is needed.
• Implementation of risk-based supervision is in progress.

Key findings

• Banking system solvency: Certain banks require new capital even under the baseline scenario due to low profitability and increasing credit losses.
• Stress scenarios: Capital shortfalls increase under stress scenarios, though the overall required resources remain manageable.
• Regulatory progress: Bank regulation and supervision have greatly improved in recent years.
• Remaining supervisory gaps:
  • Related party lending
  • Country and transfer risks
  • Operational risks
  • Supervisory interactions with external auditors
• Supervisory modernization: Implementation of risk-based supervision is underway.

Policy recommendations and supervisory priorities

• Strengthen oversight and limits on related party lending.
• Enhance monitoring and management of country and transfer risks.
• Improve operational risk frameworks and mitigation measures.
• Tighten and formalize supervisory interactions with external auditors.
• Continue development and rollout of risk-based supervision across the banking system.

Subjects and keywords (as listed)

• Subjects: Banking, Capital adequacy requirements, Commercial banks, Correspondent banking, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Financial services, Loans, Stress testing
• Keywords: asset quality, B. bank resolution, bank assets, bank governance, bank profitability, banking sector, banking system, Capital adequacy requirements, CBR balance sheet, CBR financing, CBR inspection, CBR law, CBR liquidity provision, CBR policy, Commercial banks, Correspondent banking, CR, cross-border bank exposure, Global, ISCR, Loans, mid-sized bank, Stress testing, TD exercise

Content in this bundle

• _cr16231 — Executive Summary and Key Findings
  • _cr16231 — Executive Summary and Key Findings (Markdown version)
  • _cr16231 — Executive Summary and Key Findings (PDF)