There are positive changes in Armenia's banking system. This was stated by Martyn Galstyan, Chairman of the Central Bank of Armenia, during the forum on “Regional Challenges and Opportunities in Cooperation with European Banks” on November 7.
According to his assessment, the resilience of the banking system in terms of financial stability has improved in recent years. He noted that the Central Bank's policy was aimed at consolidating the successes of the past years and molding a margin of safety to overcome challenges in the future. “Part of the banks' profits were channeled to form a counter-cyclical capital buffer, which was raised to 1.75% in the latest decision. As of today, the size of the loan portfolio is growing, which is facilitated by high rates of lending to households and the construction sector,” Galstyan noted. He added that there is a high growth of liquidity in the banking system, which ensures a high level of resistance.
The Central Bank Governor assured that the Armenian banking system has undergone serious transformations, especially the risk management and compliance functions. According to his assessment, it is one of the most important functions of banks at the moment. “Within three years, the number of employees in the compliance area has almost doubled. The Central Bank, on its part, is giving serious attention to high level of risk management and compliance in commercial banks as it is important for smooth financial inflows into the country. We also attach importance to environmental, social and corporate governance (ESG) and we are going to create conditions and requirements to form clear rules of the game for the financial system in this direction,” he emphasized.
Galstyan said the Central Bank will soon publish a revised strategy in which environmental, social and corporate governance is given an important role. “In addition, we attach importance to raising the corporate governance standards of banks, which is one of the guarantors of the stability and competitiveness of the banking system in the long term,” he explained.
Martyn Galstyan also stated that the challenges in the rapidly changing world, especially in the South Caucasus region, are diverse and they are transforming very quickly, which requires a timely response. “This reaction will be understandable if people trust us. Trust is one of our valuable assets, and we at the Central Bank aim at strengthening this trust,” the Central Bank Chairman concluded.
Reprinted from https://news.am/
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