Bank of Albania approves amendments for credit risk regulations

The Supervisory Council of the Bank of Albania Sunday approved amendments to two regulations for the purpose of regularly assessing market and liquidity risks.

The amendments to the regulation "On credit risk management by banks and branches of foreign banks "were made with a view to repeal the use of credit risk mitigation techniques for provisioning purposes, given that such techniques are recognized by the authority and are comprehensively addressed in the provisions of the Regulation "On the capital adequacy ratio".

They will be used by banks for credit risk mitigation, in the context of calculating the size of exposures and capital needs, for credit risk monitoring.

The amendments to the regulation "On minimum requirements for disclosure of information by banks and branches of foreign banks" were made for the purpose of aligning the requirement of the authority on the disclosure of information by banks with the new requirements in the Regulation "On the capital adequacy ratio", to enhance transparency and promote market discipline.

Bank of Albania said that encouragement of market discipline through constant compliance with requirements for disclosure of information allows market actors to assess the presented information on capital, financial performance, risk exposure, risk assessment and management, etc. Endit