Regulation of banking groups to meet global standards
The Bank of Russia is working to redefine the principles whereby banking groups calculate capital assets, required reserve ratios and capital adequacy buffers.
The proposed novations aim to create an arbitrage-free regulatory environment for banking services and optimise the calculation of regulatory ratios for banking groups’ head offices, including global industry players.
In this way, banking groups will calculate their capital adequacy buffers based on statutory requirements applicable to the country of residence of group subsidiaries.
Head offices of credit institutions within a banking group will be able to consolidate their smaller participants’ reporting based on equity accounting. The revision is envisaged as an improvement in banking group regulation, as part of the efforts to align it to International Financial Reporting Standards as well as standards for non-credit financial institutions’ reporting.
The novel approaches are introduced in the draft Bank of Russia Ordinance ‘On Amending Bank of Russia Regulation No.