June 29, 2012
The conference organized by the Central Bank of Uzbekistan and the IMF analyzed issues of stress testing
About 300 representatives of the banking system of Uzbekistan have gathered at the international conference in Tashkent, which was organized by the Central Bank, together with experts from the International Monetary Fund.

The conference was held as part of the execution of the Decree of the President of the Republic of Uzbekistan \"On the priority areas for further reforming and improving the stability of the financial and banking system of the republic in 2011-2015 and achieving high international rating indicators\", and addressed stress-testing of financial solvency, scoring, analysis and liquidity of commercial banks.

It should be noted that Uzbekistan has become one of the first countries in the CIS to hold such an event.

As emphasized in his speech, Deputy Chairman of the Central Bank Shukhrat Haydarov, Uzbekistan\'s leadership pays special attention to the development of the banking system, increase of its stability and strengthening the liquidity of financial and banking system.

\"In this direction, the Central Bank of Uzbekistan has also done considerable work, and as a result of the undertaken measures, performance of the banking system of Uzbekistan not only meets the requirements of international standards, but also has a more stable position on some of regulations. Thus, the current level of capital adequacy of the banking system of Uzbekistan is 3 times higher and liquidity - more than 2 times higher than the established international standards. It should be noted that the Central Bank uses modern methods of stress testing in the analysis of the banking system and banks of Uzbekistan introduced a mechanism to evaluate the financial condition and stability on the basis of international standards. This conference is a logical continuation of the implementation of tasks to further reform the financial and banking system and provides an effective opportunity for representatives of the banking system to receive, and subsequently put into practice new skills in risk management,\" he said.

Shukhrat Haydarov added that the importance of risk management in banking increases as banks and supervisors around the world recognize the need for high quality risk management for the successful development of banks individually, and to ensure the reliability of the banking system as a whole.

In turn, at the conference the experts of the International Monetary Fund noted that in conditions of the global financial crisis, well thought out and timely Uzbekistan complex crisis management solutions to ensure stable and uninterrupted operation of financial, economic and banking and credit system, helping the real sector of the economy and social support in the country were of great importance for softening and neutralizing the effects of the crisis. In particular, in the field of macroeconomic factors that have positive impact, rapid economic growth of Uzbekistan, the stability of the banking system and low public debt of our country were marked.

At the conference, the International Monetary Fund economist, Heiko Hesse shared his views on the development of the banking system of Uzbekistan and said that the IMF maintains its positive conclusions about the stability of the country\'s banking sector.

These findings indicate the ability of banks in our country in timely manner to fulfill all the urgent obligation, independence in the management of financial resources and liquidity of the positive economic environment, the ability to diversify the assets of appropriate level, to manage risks that are an integral part of banking operations, presence of a strong monitoring and coordination of their activities.

The event discussed issues of implementation of stress testing as a method to assess the sensitivity of the loan portfolio to significant changes in macroeconomic indicators.

It was noted that stress testing can be used to assess the risks of exposure of the organization in a stressful environment that allows one to develop or select appropriate strategies for managing these risks, as well as a means of assessing the ability of the credit institution to withstand stressful situations in terms of profitability and capital adequacy.

\"Today, stress testing is becoming more common method of risk analysis in commercial banks, as bank regulation prescribes the use of stress testing by banks when applying internal ratings. In accordance with the recommendations of the Basel Committee on Banking Supervision, banks that use internal ratings model, should implement thorough stress-testing to assess capital adequacy and liquidity. The essence of stress testing is to understand what might happen, what losses may be incurred by the bank in any unexpected situation. Stress testing is used to assess the overall financial system, its vulnerability to unexpected events,\" said Boltaev Akbar, head of the management of the Central Bank of Uzbekistan.

The seminar analyzed international practice to conduct stress tests, specialists of commercial banks and the IMF experts exchanged experiences and examples of plausible stress scenarios, which may be subject to commercial banks.

Given the urgency of the theme dedicated to the activities of banks in Uzbekistan under the negative impact of the global economy development, experts from the International Monetary Fund, based on best international practice analyzed performance of the banking system and formulated a number of proposals that can be applied in Uzbekistan.

According to participants, the recommendations of the conference will further deepen reforms and improve the stability of the financial and banking system of the republic, change attitudes and evaluation system of banks and the entire financial and banking system, providing output to a higher level of organization of banking activities in accordance with generally accepted international norms, standards and performance indicators. (Source: UzReport.com)


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