On Nov. 8, RUS CB published recent banking regulation decisions.
RUS CB announced it made a number of decisions on banking regulation.
Countercyclical Capital Buffer
RUS CB decided to adjust the schedule for establishing the national countercyclical buffer to capital adequacy standards (referred to as the countercyclical surcharge).
From Feb. 1, 2025, the countercyclical buffer was set at 0.25 percent of risk-weighted assets, and from Jul. 1, 2025, at 0.5 percent of risk-weighted assets.
High corporate lending growth prompted this measure (14.5% growth since beginning of 2024) and the sector’s capital adequacy ratio declined from 13.3% to 12.1%.
Limit Credit Risks for Large Companies
Over half of the corporate lending growth in 2024 was due to large companies, which have shown less sensitivity to interest rate hikes and new macroprudential regulations will introduce higher risk coefficients for loans to large, heavily indebted companies.
The new rules will also set a minimum risk coefficient for high-debt companies.
Implementation expected in the first half of 2025 to enhance banking sector stability.
Use of Irrevocable Credit Line (ICL)
RUS CB introduced a decision on the temporary expansion of systemically important banks' use of irrevocable credit line in order to meet short-term liquidity ratios.
It is specified that up to 1 Jan. 2025, banks’ short-term liquidity ratio should not fall below 50% without the ICL, and 60% between Jan. 1, 2025 and Jul. 1, 2025.
This aims to ease the impact of liquidity requirements on pricing for bank products.
Other ICL parameters are unchanged; methodology updates will be shared with banks.
Effectiveness
Use of irrevocable credit is effective Jan. 1, 2025 and countercyclical capital buffer is effective Feb. 1, 2025.
