Promising Areas of Banking Regulation and Supervision Development: Current Status and New Objectives

The initiatives to be implemented by the end of 2025 include updating the approaches to provisioning for retail loans, in particular, to using official data to assess borrowers’ financial standing. The regulator will publish the concepts of supervisory stress testing and subordinated capital instruments.

Next year, the Bank of Russia will revise approaches to provisioning for corporate loans. In particular, it will establish a mandatory set of debt service-to-income ratios and their maximum values for assessing borrowers’ financial standing. The regulator is also considering allowing banks to apply reduced risk weights to loans under public-private partnership agreements.

The stages that have already been implemented include:

• transitioning all banks with a universal licence to a finalised approach to calculating capital adequacy ratios and enabling banks with a universal licence to finance priority investment projects with a lower capital burden;
• developing a new liquidity coverage ratio, factoring in the national specific features (which is to come into force on 1 October 2025);
• adjusting limits on open currency positions to enable banks to better manage their balance sheets and rule out the understatement of the foreign exchange risk;
• updating requirements for the financial stability recovery plan to make it an effective element of anti-crisis management;
• publishing revised parameters for the risk-sensitive limit on immobilised assets, the concept of the new method to classify credit institutions as systemically important, a consultation paper on revising the approach to assessing banks’ economic situation, and results of the discussion of the consultation paper on regulating credit concentration risks.