8 Background Tables
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Mr. Robert T Price
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Mr. Malcolm D. Knight https://isni.org/isni/0000000404811396 International Monetary Fund

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Mr. Arne B. Petersen
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Abstract

The following tables provide a summary of the reforms in the key central banking areas for the Baltics, Russia, and other countries of the former Soviet Union. The tables start with the implementation of monetary policy—specifically, the institutional context in which the central bank operates and its short- and medium-term operating targets, markets and interest rate management, and instruments and operating arrangements. They then move on to developments in the foreign exchange area and priorities for future reform. Significant attention is devoted to banking supervision and bank restructuring—first, the institutional framework of the banking system is covered; then, the structure and performance of the banking system is summarized; and, finally, bank restructuring measures in the individual countries are listed. The chapter concludes with summaries of payment systems and central bank accounting reforms.

The following tables provide a summary of the reforms in the key central banking areas for the Baltics, Russia, and other countries of the former Soviet Union. The tables start with the implementation of monetary policy—specifically, the institutional context in which the central bank operates and its short- and medium-term operating targets, markets and interest rate management, and instruments and operating arrangements. They then move on to developments in the foreign exchange area and priorities for future reform. Significant attention is devoted to banking supervision and bank restructuring—first, the institutional framework of the banking system is covered; then, the structure and performance of the banking system is summarized; and, finally, bank restructuring measures in the individual countries are listed. The chapter concludes with summaries of payment systems and central bank accounting reforms.

Table 8.1.

Institutional Background for Monetary Policy Implementation, 1997

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Sources: Country authorities; and IMF.
Table 8.2.

Markets and Interest Rate Management, 1997

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Sources: Country authorities; and IMF.
Table 8.3.

Instruments and Operating Arrangements, 1997

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Sources: Country authorities; and IMF.
Table 8.4.

Developments in Foreign Exchange, 1997

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Sources: Country authorities; and IMF.
Table 8.5.

Priorities for Future Reform in the Foreign Exchange Area

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Source: IMF.

Bullet marks on this criterion indicate that open position limits are not imposed, or are not strictly enforced, or are large compared with international standards (which tend to be about 15 percent and 30 percent on individual currency and aggregate positions, respectively).

Bullet marks on this criterion imply that the design of a strategy for an orderly liberalization of capital account transactions should be a priority measure.

Table 8.6.

Legal and Regulatory Framework for Banking Supervision

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Sources: Central banks; and IMF.

Total capital to total assets. 8 percent is for Tier 1 capital to total assets.

National Bank of Georgia plans to decrease the limit to 25 percent.

Including branches and subsidiary financial enterprises (excluding Moscow branch of Anelik Bank).

15 percent for each customer, 60 percent of total equity holdings.

Armenia has a separate law.

There are laws on debt collection but not specifically on loan collection.

Incorporated in Banks and Banking Act.

Including branches and subsidiary financial enterprises.

Only investment banks are authorized to have holdings in nonfinancial enterprises.

Introduced in the National Bank of Moldova on July 1, 1995. Since January 1998 commercial banks will transfer to the new chart of accounts based on IAS.

The specific law is no longer in force, but the relevant provisions are included in the civil code.

There is no specific law, but legislation in force does stipulate procedures and means of compulsory debt collection.

Included in central bank regulations and law on collateral.

Specific law on money laundering is being developed, and provisions exist within the commercial banking law.

Law on prevention of money laundering adopted on June 19, 1997.

Includes staff of central bank office and 89 regional branches.

Only central bank office; branches also perform supervisory functions.

National Bank of Ukraine does not exercise the authority (unless license is withdrawn).

The Central Bank of Russia is entitled to place dismissal requirements on the owners of a bank.

The Central Bank of Russia can take the case to court to initiate liquidation.

Supervision includes branches.

To be introduced in 1998.

Scheduled for 1998.

Limits are in effect on a stake in the capital of any organization. Proposed to establish limits individually on a stake in the capital of nonfinancial institutions.

Accrued in a separate off-balance sheet account.

Not a special central bank law but a regulation under the Law on Banks and Banking Activities.

Related provisions are included in the new Central Bank Law.

Not functioning.

Ratification of Strasbourg Convention.

Table 8.7.

Structure and Performance of the Banking Sector

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Sources: Central banks of the Baltic countries, Russia, and other countries of the former Soviet Union.

The average capital adequacy ratios for Armenia, which simply total recorded capital divided by total recorded assets, are misleading. In particular, the 1995 and 1996 numbers do not take account of large amounts of nonperforming loans against which provisions, or write-offs, were scheduled to be phased in over the two years to end-1997. A better indication is total capital-to-risk-weighted assets, both adjusted for the volume of weighted classified loans. This ratio was -9.7 percent at mid-1996, +12.3 percent at the end of 1996, and + 25.5 percent at end-1997.

Data as of 1994.

The grouping of second-tier banks was changed, by amending the law “On Bank and Banking Activity in the Republic of Kazakhstan” on July 11, 1997.

In the Kyrgyz Republic, total capital/risk-weighted assets times 100 percent.

Included are banks in which over 50 percent of the shares in authorized capital are held by the Central Bank of Russia and the Russian Federation’s Federal Property Fund.

Branches of foreign banks.

Minimum requirements as of January 1, 1998, not actual.

No data available for 1995.

Includes branches of Agricultural Bank.

Of which two have 100 percent foreign ownership.

Of which four have 100 percent foreign ownership.

Table 8.8.

Bank Restructuring Measures

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Sources: Central banks of the Baltic countries, Russia, and other countries of the former Soviet Union.

The data were not submitted for 1997.

Financial Institutions Development Loan. $2.6 million has been disbursed, the remainder of the loan has not been issued.

Bank sector restructuring is in advance stage.

Recapitalization through new owners, rather than directly by government.

The government of Armenia took over the loans to problem state-owned enterprise borrowers by one bank through an asset swap arrangement.

Stopped working in April 1996.

Prudential Bank Supervision Department.

The disbursement of the Financial and Enterprise Sector Restructuring Loan is under way.

As of July 1997, the functions with regard to liquidation of banks as well as regulation and oversight of the liquidation process was transferred to the courts.

State-owned banks only.

Government guarantees.

The loan will be granted only when loan’s conditions are met.

The compulsory merger/breakup of banks is not included in the powers of the Central Bank of Russia.

Limited volume.

Government has formally guaranteed some loans to state enterprises.

Government guarantee deposits only in state-owned banks.

Only in savings bank.

Table 8.9.

Features of Payment Systems, 1997

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Source: IMF.
Table 8.10.

Central Bank Accounting Reforms, 1997

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Source: IMF.
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