ArmInfo.The Central Bank of Armenia is considering the possibility of increasing the countercyclical capital buffer (CCM) by 0.5%. Chairman of the Central Bank of the Republic of Armenia Martin Galstyan stated this on January 31 during a press conference. In this regard, he stressed that this issue was discussed at a meeting of the Board of the Central Bank, and is now being discussed in the Ministry of Justice. "I hope we will publish this decision soon," he stressed.
At the same time, Galstyan noted that the Central Bank, through its prudential decisions, contributes to deepening the tendency of banks to form buffers in accordance with new standards. Meanwhile, it is worth recalling that on October 24, 2022, the Central Bank of the Republic of Armenia already decided to increase the countercyclical capital buffer (CCB) to 1% of risk-weighted assets, with the entry into force of this norm from May 1, 2023. Before that, for more than two years, the Central Bank kept the capital adequacy ratio - the countercyclical capital buffer - at 0%. And most likely, today's statement by the head of the Central Bank means an increase in the CCB from 1% to 1.5%, and it is not excluded that instead of the envisaged 1% from May this year 1.5% will come into force
The purpose of increasing the CCB is to support the banking sector's resilience to systemic risks, the likelihood of materialization of which remains high. The regulator bases its decision on a comprehensive analysis of the development of the macro-financial and credit markets, which guided and considered it appropriate to move the bar of the countercyclical capital buffer from zero.
