The Central Bank of the Republic of Azerbaijan has approved changes refining how systemically important banks are assessed and when related capital buffer adjustments take effect. Building on its revised designation framework, the changes align assessments with the risk-based supervisory cycle and establish an annual deadline of Sept. 1 for the Central Bank Board to approve the list of systemically important banks. The calculation methodology now excludes banks’ assets held with the regulatory authority from the indicator for assets placed with financial institutions. For transactions conducted through the Azerbaijan Interbank Payment System, or AZIPS, only customer transfers and interbank payments will count. A bank newly designated as systemically important or moved to a higher systemic-importance group will face the increased capital buffer from Jan. 1 of the following year. A reduced buffer will apply immediately after approval of the annual list when removal from the list or reassignment to a lower group has been confirmed by calculations for two consecutive years.
2026-09-03Central Bank of the Republic of Azerbaijan
Central Bank of the Republic of Azerbaijan refines systemic bank assessments and capital buffer timing
The Central Bank of the Republic of Azerbaijan has refined its systemically important bank assessment methodology and aligned it with the risk-based supervisory cycle. The changes narrow the transactions and assets counted in key indicators, set Sept. 1 as the annual list-approval deadline, and establish different implementation timing for capital buffer increases and reductions.