Financial Crime World

Bank Regulatory Capital to Risk-Weighted Assets in the Former Yugoslav Republic of Macedonia

The former Yugoslav Republic of Macedonia has implemented a set of regulatory requirements for banking institutions, with a focus on maintaining a healthy capital adequacy ratio. One key metric used to assess this is the bank regulatory capital to risk-weighted assets (RWA) ratio.

According to data from the World Bank, the RWA ratio in the former Yugoslav Republic of Macedonia has fluctuated over the past two decades.

1998-2002: High Capital Adequacy

  • In 1998, the ratio stood at 25.9%, indicating a relatively high level of capital adequacy among banks.
  • The ratio remained stable throughout the early 2000s, averaging around 28-29% between 2000 and 2002.

2004-2011: Decline in Capital Adequacy

  • However, in the mid-2000s, the RWA ratio began to decline, falling to 23% in 2004.
  • The trend continued until 2011, when the ratio reached a low of 16.7%.

2012-2020: Recovery and Stability

  • The ratio has since recovered somewhat, reaching 17.1% in 2012 and 16.8% in 2013.
  • In recent years, the RWA ratio has remained relatively stable, averaging around 15-16% between 2014 and 2020.

Comparison with International Standards

While the current level of capital adequacy is still considered satisfactory by international standards, it is lower than the average for many other European countries. This suggests that there may be room for improvement to ensure that banks are adequately capitalized to withstand potential risks and shocks.

Conclusion

The data suggests that the regulatory requirements for banking in the former Yugoslav Republic of Macedonia have been effective in maintaining a stable level of capital adequacy among banks. However, there is still scope for further improvement to enhance the resilience of the banking sector and support economic growth.