The Central Bank has marked the way for banks – Finance – Kommersant

The Central Bank revealed its plans to transform the regulation of the banking system for the next few years. According to the regulator, a number of the usual ways to limit risks under the new conditions are not effective enough and require changes. Experts note that a number of proposals are developing a policy of macroprudential regulation, but some of the ideas of the Central Bank, including in the retail lending segment, may have negative consequences for the market.

The Central Bank presented a large report on strategic initiatives in the field of banking regulation and supervision for the medium term. The regulator explained that in the acute phase of the crisis, it activated “an unprecedented package of temporary relief, which is now being phased out.” As a result, they believe in the Central Bank, in the banking sector “new risks began to appear, with which the existing regulation is not effectively fighting.” At the same time, they believe that regulation should ensure the stability of banks in a crisis “without the use of serious indulgences and emergency measures of state support.”

Experts call the most interesting initiatives to adapt the banking system to new conditions.

As Olga Ulyanova, an independent expert, notes, the regulator essentially has to invent and set up very special tools that are unlikely to be used anywhere else in the world and reflect not generally accepted international practice, but the specifics of the economy under sanctions pressure. “But the fact inspires respect that the regulator does not abandon international practice either, laying in its plan for the next three years the mandatory transfer of systemically important credit institutions to an approach based on internal ratings,” the expert emphasizes.

ACRA CEO Mikhail Sukhov draws attention to the fact that the Central Bank’s report suggests a fundamentally new attitude to the use of credit ratings of national agencies: “Ratings are gradually being used to assess significant aspects of banks’ credit risks, including determining the investment class of banking assets and applying risk weights related to the taxonomy of the government” . He considers this approach to be a reasonable combination of stimulating financing of projects for structural adaptation of the economy with the need to ensure the financial stability of banks.

“An approach similar in meaning, involving a combination of measures that stimulate the development of certain areas of the banking business structure, and strengthening the financial stability of banks, can be traced in almost all new instruments of banking regulation, namely: the development of the deposit insurance system (differentiation of rates in the deposit insurance system), devaluation bank balance sheets (separation of limits on open currency positions), taking into account climate risks (stimulating the disclosure of information by borrowers of banks),” explains Mikhail Sukhov. He is confident that the consistent implementation of the principle of stimulating and discouraging individual products, combined with risk control, “reinforces the development contour laid down earlier by the macroprudential regulation system.” “The Central Bank is taking a step towards the transition from the role of a regulator to the role of a conductor,” Mr. Sukhov believes.

According to RegBlok chief analyst Anna Avakimyan, initiatives related to limiting the risks of concentration of immobilized assets (IA) and retail lending will have the greatest impact on the market.

To combat the concentration risk of EAs, the Central Bank proposes to introduce a risk-sensitive limit (RCL) for IAs in the form of a share of capital for banks with a universal license. The excess of RCL will be deducted from the regulatory capital to calculate the standards. As Anna Avakimyan notes, the level of concentration of assets and loans always grows during a crisis: “It is often this kind of captivity that helps to get through a difficult period without fatal losses, and if concentration regulation is tightened, banks will be left without a lifeline in the form of a wide but low-margin pool of assets, which makes it difficult to function at a time when diversification is hardly possible.”

To strengthen the regulation of the retail lending market, it is planned to introduce an increased reserve for mortgage loans with an overpriced apartment, the so-called preferential mortgage from the developer, as early as the first quarter of 2023. In addition, it is planned to prepare changes to the calculation of the full cost of the loan, including all payments of the borrower, and begin to calibrate the criteria for a new category of high-risk borrowers whose financial situation is worse than average, but still allows regular debt servicing. It is also planned to prepare for the introduction from January 1, 2024 of the obligation of banks to inform borrowers about risks if the debt burden exceeds 50%.

On the one hand, according to Anna Avakimyan, all this will cool the consumer lending market, and on the other hand, it will reduce the availability of mortgage and consumer loans for the population: “Growing credit losses will encourage banks to compensate them from other sources – commissions, insurance, stepped rates” .

The Central Bank clarifies that some of the proposals are presented “for discussion at the initial stage.” The regulator allows the correction of “separate directions” or even a complete rejection of them.

Maxim Buylov, Olga Sherunkova