Nothing threatens Armenian banking system

YEREVAN, March 4. /ARKA/. The results of regular calculations are evidence for the Central Bank of Armenia (CBA) that nothing threatens the Armenian banking system, stated CBA Vice-Chairman Vache Gabrielyan.

The exchange fluctuations will cause losses to the banking system, but none of the banks will encounter solvency problems, lack funds or have to make considerable capital expenses, Gabrielyan stated at the Novosti press center.

Yesterday morning the CBA Board took into account the gradually worsening trade conditions amid the present global economic and financial crisis, as well as lower capital flow rates, and decided to restrict its interventions in the currency market thereby reverting to its floating exchange rate policy. CBA experts believe that the USD average exchange rate will be 360-380 AMD/$1 this year.

Gabrielyan admitted the risks for the banking system as, with liabilities changing, assets do not change at the same rate. As a result of the changes in the exchange rate bank “may and do sustain losses”.

The CBA Vice-Chairman once more mentioned regular thorough calculations.

“Specifically, there is a method, stress-tester, we regularly apply to forecast the situation in the banking system in case of certain unfavorable developments, including unplanned exchange fluctuations,” he said.

As of December 31, 2008, twenty-two banks and 382 branches were operating in Armenia.

As of December 31, 2008, the total assets of the Armenian banking system exceeded 1,000bln AMD, total capital reached 238.4bln AMD, and liabilities, 797.9bln AMD.

At present, the total assets of the Armenian banking system constitute 28.39% of the GDP. The crediting of the country’s economy has reached 6276bln AMD against 434.5bln AMD early this year. –0--