Home » Press centre » News » Archive » 2017

NBU Introduces Annual Assessment of Banks' Resilience

22 December 2017

Press Release

 

The National Bank of Ukraine introduces an annual assessment of banks' resilience.

 

The relevant Regulation On Assessing Resilience of Banks and Banking System of Ukraine was approved by NBU Board Resolution No.141, dated 22 December 2017.

 

The assessment will be made annually as of 1 January, starting from 1 January 2018. It will have three stages.

 

      First - checking the bank's asset quality and eligibility of collateral pledged for loans by audit firms included in the Register of audit firms.

      Second - extrapolating the first stage findings and assessing the bank's capital adequacy as of the assessment date.

      Third - assessing the bank's capital adequacy by NBU based on the results of stress testing according to the baseline and unfavorable macroeconomic scenarios on the three-month forecast horizon.

 

All solvent banks will pass through the first and second assessment stages. The NBU will specify the list of banks to pass through the third stage. The list will be formed taking into account an impact of every bank on banking system stability.

 

The first stage will be executed by independent audit firms in the context of carrying out annual audit checks of annual financial statements, consolidated financial statements, and other information related to bank's financial and economic activities according to the requirements of Regulation No. 389[1]. The NBU will provide the second and third stages of assessment of banks' resilience, extrapolating the results of the first stage and of the stress testing.

 

Stress test will be conducted according to the baseline and unfavorable macroeconomic scenarios using the models developed by the regulator. The NBU will annually bring up to date macroeconomic scenarios, stress testing models, and the procedure for their using.

 

If, according to the results of the second and third stages of bank's resilience assessment, bank's capital adequacy ratios will be lower than those set by the NBU, the bank will need to increase its capital. The banks that need to increase their capital will have to develop Capitalization Programs and/or Action Plans to maintain or restore the level of their capital.

 

Results of banks' resilience assessment will be posted on the NBU website before the end of the relevant year.

 

Implementing an annual resilience assessment will allow to identify not only current but also future risks for banks. This will enable banks to generate capital sufficient to cover future risks, which will ensure banking system stability and protection of banks depositors' and creditors' interests.

 



[1] Regulation  On the Rules Governing the Submission by Banks to the National Bank of Ukraine of Auditor's Reports on Findings of Annual Checks of Banks' Financial Statements approved by NBU Board Resolution No.389 dated 9 September 2003 and registered by the Ministry of Justice of Ukraine as No. 871/8292 dated 29 September 2003 (in the wording of NBU Board Resolution No.341 dated 21 September 2011) (as amended).  


  Top  
 
Last modification   22.12.2017