IMF published its staff report on conclusion of the 2017 Article IV consultation with the Republic of Serbia and completed the seventh review of Serbia’s economic performance under the Stand-By Arrangement. Directors welcomed that financial sector reforms under the program have strengthened the resilience of the sector, helping to support future growth. They emphasize that good progress has been made in resolving nonperforming loans and these efforts need to continue.
The National Bank of Serbia (NBS) is making good progress in harmonizing the regulatory framework with EU standards. Basel III capital and liquidity coverage regulations became effective starting at the end of June 2017, establishing countercyclical capital buffers (currently set at 0%) and systemic risk capital buffers (of 3%) on banks with significant foreign currency credit portfolios. Minimum capital requirements have been reduced from 12% to 8%, while additional capital buffers have been introduced—in line with the EU’s Capital Requirement Directive. In addition, the NBS has adopted a framework for domestic systemically important banks (D-SIBs), identifying seven banks as D-SIBs and subjecting them to additional capital buffers (of 1 or 2%).
The authorities and staff agreed that the effective enforcement of these regulations will strengthen the resilience of the banking sector and further align the prudential framework with international standards. The authorities expect no significant issues related to banks’ compliance with the new minimum capital requirements, but some technical challenges remain in relation to reporting and capacity. Staff underlined the importance of continuing NBS engagement with banks to ensure a smooth implementation process.
Related Link: Staff Report (PDF)
Keywords: Europe, Serbia, Banking, Article IV, Basel III, CRD, IMF
Previous ArticleCBRC Issues Measures for Supervision of Three Policy Banks
MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.
EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).