30 Sep 2010 15:21

CBR readying proposals for expanding list of Basel-III liquid assets

MOSCOW. Sept 30 (Interfax) - The Central Bank of Russia is preparing proposals for expanding the list of liquid assets established in the context of requirements under the Basel 3 capital-requirements accord, director of the Central Bank of Russia's department for bank regulation and oversight Alexei Simanovsky said.

"We cannot today - I mean the Bank of Russia's position - agree with the list of liquid assets that figures in the project documents," Simanovsky said in a Russia 24 television interview.

"We judge that it is too narrow, and it is to a large degree oriented towards countries where there are a large amount of governmental securities that are acknowledged to be liquid," Simanovsky said. But other assets that are "liquid from the standpoint of our current regulation, for example, assets under which banks are freely able to get Central Bank of Russia credits, in this draft document are not considered to be liquid assets," he said.

The CBR's view is that such assets ought to be considered liquid, seeing as the country's central bank stands behind them.

Other countries take a similar view, Simanovsky said. "We're not alone in these proposals, seeing as we're in the same situation as a number of other countries who suggest the same thing," he said.

Simanovsky said he is confident that account will be taken of the proposals when the accord is worked up. "Regulation is a certain collection of sensible requirements, and sense has to sooner or later win out, even if opposed by super-conservatism," he said.

The Basel Committee on Banking Supervision, which brings together the central banks of twenty-seven countries, including Russia, agreed at its latest meeting on September 12 to drastically stiffen requirements on the banking capital of lending organizations. The new requirements, known as the Basel 3 accord, will start taking effect in some countries beginning in 2013.

The Basel Committee decisions are expected to be approved this November at a 'G-20' summit this November.