Russia’s banking laws now meet Basel III criteria

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/13

The Basel Committee for Banking Supervision, which operates under the Bank for International Settlements, reports that Russia is compliant with the Basel III capital and liquidity standards. Some features of Russia’s national requirements are even stricter than those of the Basel III framework. Over the past two years, the Central Bank of Russia has implemented significant improvements to its bank supervision standards. The Duma approved the final cornerstone piece of Basel III legislation in December 2015.

The CBR will apply the new capital standards to all credit institutions regardless of size, while the Basel III liquidity requirements effective from the start of this year apply only to Russia’s ten largest, systemically important, banks (i.e. Unicredit, Gazprombank, VTB Bank, Alfa-Bank, Sberbank, Otkritie, Rosbank, Promsvyazbank, Raiffeisenbank and Rosselkhozbank). Russia’s Deposit Insurance Agency and state development bank VEB are considered public sector entities that are exempt from bank regulation. The Basel Committee’s report on Russia noted that implementation of the Basel III rules has only just begun and evaluation of their efficacy will take time.

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