Financial Crime World

ARMENIA TIMES

BANKS’ LIQUIDITY STANDARDS REVEALED

New Regulations Aim to Ensure Financial Stability in Armenia

Yerevan, Armenia - The Central Bank of Armenia has released new regulations governing the calculation of highly liquid assets and total assets for banks operating in the country. These rules aim to ensure financial stability and prevent liquidity crises.

Highly Liquid Assets Defined

According to the new regulations, highly liquid assets will include:

  • Cash
  • Cash equivalent payment documents
  • Correspondent accounts with the Central Bank
  • Bank gold
  • Transfer notes issued by the Ministry of Finance
  • Securities listed in points 34.4-34.9
  • Bonds issued by refinancing credit organizations

Calculation of Total Assets

The regulations specify that banks’ total assets will be calculated by deducting certain secured assets from the total value of their assets, including:

  • Book value of assets secured by transfer notes
  • Securities issued by the Central Bank and Republic of Armenia Government treasury bonds
  • Banking gold
  • Armenian drams and Group I currency funds kept in banks’ accounts

Additionally, banks will also need to deduct credit provided from targeted funds attracted from foreign banks and financial organizations, which are guaranteed by the Republic of Armenia Government or the Central Bank.

Importance of Implementing New Regulations

The new regulations aim to ensure that banks maintain sufficient liquidity to meet their obligations and prevent a systemic crisis. The Central Bank has emphasized the importance of implementing these rules to protect the stability of the Armenian banking system.

KEY TAKEAWAYS

  • Highly liquid assets include cash, cash equivalent payment documents, correspondent accounts with the Central Bank, bank gold, transfer notes issued by the Ministry of Finance, securities listed in points 34.4-34.9, and bonds issued by refinancing credit organizations.
  • Total assets are calculated by deducting certain secured assets from the total value of banks’ assets.
  • Banks must maintain sufficient liquidity to meet their obligations and prevent a systemic crisis.

SOURCE

Central Bank of Armenia Regulation No 322-N of November 30, 2011.