Banking Regulation Department
The Banking Regulation Department develops and implements international approaches to the regulation of credit institutions, taking into account the specifics of the functioning of the Russian banking sector and the proportionate regulation principle.
The Department devises regulations to govern banking business, including those that specify the methodology for calculating required ratios and equity (capital) and assessing the requirements for capital adequacy to cover credit risk, market risk and operation risk, and establish the methods for evaluating liquidity risk and interest rate risk across the bank portfolio. The Department sets the requirements for the risk and capital management procedure and for internal control organisation at credit institutions and banking groups, and stipulates the procedures for loss provisioning by credit institutions and for the disclosure by credit institutions, banking groups and holding companies of information on their operations, including on risks.
The Department’s project works involve the following:
— the validation of credit risk assessment methods and models for capital adequacy calculation according to the internal ratings-based (IRB) approach;
— the methodology for the evaluation of the quality of internal capital adequacy assessment procedures (ICAAP) and of the capital adequacy of credit institutions and banking groups;
— the validation of the banking risks assessment models applied by other structural units of the Bank of Russia;
— proportionate regulation;
— the improvement of the deposit insurance system;
— the enhancement of the regulation of credit institutions on a consolidated basis.
The Department also provides methodological support for banking supervision and regulation as regards the intrabank methods and models for assessing credit institutions’ risks and economic performance and banks’ financial standing for the purpose of their participation in the deposit insurance system, and the methodology for applying enforcement measures against credit institutions and banking groups. The Department regulates interest rates in the retail segment, and develops mathematical modelling methods in banking regulation and supervision.