{
  "title": "Republic of Azerbaijan: Financial Sector Assessment Program-Financial System Stability Assessment",
  "publication": "IMF Staff Country Reports, April 22, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2025/04/22/republic-of-azerbaijan-financial-sector-assessment-program-financial-system-stability-566422",
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  "summary": "This paper focuses on the Republic of Azerbaijan’s Financial Sector Assessment Program as part of Financial System Stability Assessment. Azerbaijan’s economy has recovered from two downturns prompted by the collapse of global oil prices in 2015 and coronavirus disease 2019 pandemic in 2020.",
  "sections": [
    {
      "heading": "Macroeconomic and systemic context",
      "content": "- Azerbaijan’s economy has recovered from two downturns prompted by the collapse of global oil prices in 2015 and coronavirus disease 2019 pandemic in 2020.\n- An intensification of regional conflicts poses risks to the economy.\n- High reliance on oil and gas revenues renders Azerbaijan vulnerable to oil and gas price declines; such declines would impact banks’ asset quality and liquidity."
    },
    {
      "heading": "Key structural risks in the banking sector",
      "content": "- Substantial reliance on volatile wholesale corporate deposits.\n- Continued high financial dollarization, particularly in business loans and deposits.\n- High credit concentration."
    },
    {
      "heading": "Financial sector resilience and regulatory gaps",
      "content": "- Further measures to strengthen regulation and supervision would reinforce financial sector resilience.\n- Long-standing issues identified in previous FSAPs remain relevant and include:\n  - The need to fully implement a consolidated supervision framework.\n  - Safeguarding the Central Bank of the Republic of Azerbaijan’s (CBA) independence.\n  - Establishing an interagency body for crisis preparedness and management.\n  - Giving the CBA full powers for bank resolution."
    },
    {
      "heading": "Thematic coverage and focus areas",
      "content": "- Anti-money laundering and combating the financing of terrorism (AML/CFT).\n- Asset quality and bank stress testing (including bank solvency stress test).\n- Emergency liquidity assistance framework.\n- Macroprudential policy and financial sector stability.\n- Financial system assets and related risk analysis frameworks.\n\nSource: Republic of Azerbaijan: Financial Sector Assessment Program-Financial System Stability Assessment (IMF Staff Country Reports, April 22, 2025).\n\n---\n\n Content in this bundle\n\n- 1azeea2025002-print-pdf\n  - 1azeea2025002-print-pdf (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1azeea2025002-print-pdf (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: April 22, 2025",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798229008754.002",
    "Azerbaijan’s economy has recovered from two downturns prompted by the collapse of global oil prices in 2015 and coronavirus disease 2019 pandemic in 2020.",
    "An intensification of regional conflicts poses risks to the economy.",
    "High reliance on oil and gas revenues renders Azerbaijan vulnerable to oil and gas price declines; such declines would impact banks’ asset quality and liquidity.",
    "Substantial reliance on volatile wholesale corporate deposits.",
    "Continued high financial dollarization, particularly in business loans and deposits.",
    "High credit concentration.",
    "Further measures to strengthen regulation and supervision would reinforce financial sector resilience.",
    "Long-standing issues identified in previous FSAPs remain relevant and include:",
    "Asset quality and bank stress testing (including bank solvency stress test).",
    "Emergency liquidity assistance framework.",
    "Financial system assets and related risk analysis frameworks.",
    "**1azeea2025002-print-pdf**"
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