23 Jun 2021 15:02

CBR wants to include lenders involved in large ecosystems in list of systemically important banks

MOSCOW. June 23 (Interfax) - Russian banks involved in large ecosystems could receive the status of systemically important credit organizations even if they do not satisfy certain criteria for the scale of their banking activity, the Central Bank of Russia said in an advisory report dedicated to regulation of banks' investments in ecosystems.

In this case, such banks would have to implement a capital adequacy premium for systemic importance in the amount of 1 percentage point.

To determine the significance of an ecosystem for the purpose of classifying the bank developing it as a systemically important credit organization or establishing an increased premium for it, such objective criteria may be used as the number of regular users, trade turnover, or the number of staff of suppliers and other enterprises that ensure the ecosystem functions.

The CBR said the proposed measure might not extend to banks involved in ecosystems as subsidiaries of major technological companies if the latter would bear the burden of the ecosystem's financial support, covering the risks for the bank.

In certain cases when the risks of an ecosystem or similar entity are particularly high and could have consequences for financial stability, the Bank of Russia may take this into consideration when setting an increased - more than 1 pp - capital adequacy ratio premium in line with the earlier voiced plans to introduce differentiated premiums for systemically important banks.

In the long term, the premium scale could be calibrated taking into account the results of stress tests of specific ecosystem risks of the banking group, including non-financial businesses.

The list of systemically important credit organizations currently includes 12 Russian banks: Unicredit Bank, Gazprombank , VTB , Credit Bank of Moscow , Alfa-Bank, Sberbank Russia, FC Otkritie Bank , Rosbank , Promsvyazbank , Raiffeisenbank, Rosselkhozbank, and Sovcombank.

At the same time, Tinkoff Bank, which is actively developing its ecosystem, has not yet received the status of a systemically important bank as it does not meet a number of criteria.

The list of systemically important banks is currently formed in stages. At the first stage, a generalized result of quantitative indicators of credit organizations' activity is determined, including size, interconnectedness with credit or other financial organizations, and volume of individuals' deposits. At the second stage, the absolute value of individuals' deposits is estimated; at the third, fulfillment by banks of one of the three criteria of international activity is checked; and at the fourth, the share of banks' assets in aggregate assets of the banking sector is estimated. The CBR may also take into consideration additional information when including a bank in the list of systemically important credit organizations.

The CBR updated the procedure for determining systemically important credit organizations in 2021, adjusting the criteria of international activity, which declined amid industry-related sanctions. Simultaneously, the regulator redistributed the weight of other indicators - the bank's size, interconnectedness with other financial organizations, and volume of individuals' deposits - included in the calculation of the generalized result.