The National Bank of Ukraine (NBU) has begun the second stage of assessing the stability of banks - processing the results of analysis of the quality of banks' assets (AQR), confirmed by an external audit. Also it started stress testing 29 banks, the press service of the NBU reports.
According to preliminary estimates by the financial regulator, the number of banks requiring capital infusions in the baseline and negative stress test scenarios will decrease compared with the previous year.
The NBU reports that by the end of this year, banks need to form a capital preservation buffer of 0.625%. It will become mandatory for each bank from the beginning of 2020, when the first stage of the introduction of the capital preservation buffer will begin. In the future, the size of the buffer will increase gradually every year until it reaches 2.5% on January 1, 2023.
"The formation of an appropriate buffer will ensure that banks create a stock of capital in excess of the minimum requirements. In the future, this will provide an opportunity to absorb potential losses that may arise in a general economic downturn without violating the capital adequacy ratio," explained the NBU.
In addition, during the second quarter, the method for determining systemically important banks will also be changed and an updated list of such banks will be made public. In the future, the NBU will require them to form a buffer of systemic importance.
For the first time NBU conducted an assessment of the stability of banks in 2018. The list of 29 banks for stress testing includes financial institutions that are the largest by three indicators: the volume of assets weighed at risk, deposits of individuals, loans to individuals.