CBR to decide when to introduce capital buffer for banks after financial review
WASHINGTON. April 17 (Interfax) - The Central Bank of Russia (CBR) will decide on when to introduce a capital buffer for banks after assessing their financial health, Central Bank chief Elvira Nabiullina told reporters.
The CBR had planned to introduce capital buffer requirements for all banks on January 1, 2016 and gradually increase them in the period to 2019. The minimum buffer for all banks was expected to be 0.625% in 2016, 1.25% in 2017, 1.875% in 2018 and 2.5% in 2019. An additional 1% capital buffer was to be introduced for systemically important banks.
However, banks have recently been asking the CBR to postpone the introduction of capital buffers due to the difficult economic situation. The issue of easing capital requirements was raised recently by the Association of Russian Banks (ARB), which sent the CBR a letter at the beginning of April. Promsvyazbank (PSB) estimated that if the CBR introduces the additional capital buffer requirement in 2016, the bank would need an additional 15 billion rubles in capital.
"We are now conducting an assessment of how given Basel III standards will affect the financial condition of our banks. We will make decisions on when to introduce given standards depending on these results," Nabiullina said.
She recalled that the CBR postponed the introduction of the short-term liquidity ratio from January 1, 2015 until July 1, based on the fact that banks are having some problems.
"In general, our strategy comes down to the fact that these standards will be gradually introduced not only because this is required by Basel, but because these are standards that we believe make it possible to improve the financial health of banks, create those very same capital buffers. This is very important for the stability of the banking system as a whole," Nabiullina said.