Agency applied buffers for banks' capital adequacy for the first time

 

The Agency for Regulation and Development of the Financial Market has applied buffers for banks' capital adequacy for the first time based on results of supervisory stress testing (SST).

Introduction of buffer calculated based on results of stress testing has become one of key innovations. Its size varies from 0% to 3% of the amount of assets and contingent liabilities weighted by risk level. This decision is designed to increase banks' resilience to potential economic shocks and improve financial stability of the entire sector.

Based on results of 2024 SST, the Agency sent letters to each bank with recommendations containing the results of stress testing and information about size of the capital buffer.

Let us recall that the Agency has completed another cycle of risk-oriented supervision in the banking sector, which included several key procedures: comprehensive assessment of SREP (Supervisory Review and Evaluation Process), regular asset quality review (AQR) and supervisory stress testing (SST).

The 2024 SST report is available on the Agency’s website.