Consolidation of bank capital to resolve problems – economist

09:55 • 11.01.17



The Armenian Central Bank’s decision raising the minimum aggregate capital up to AMD 30bn (about €58,694,664 or $61,902,900) took effect on January 1, 2017.

In an interview with Tert.am, economist Atom Margaryan spoke of positive and negative consequences of bank merger.

Mr Margaryan, of what benefit is bank merger to Armenia’s banking system?

It is the right decision. The banking system must be capable of meeting economic challenges under large-scale investment programs, especially in the context of lending of investment programs in the industrial and real economic sectors. In this respect, this is an important decision. Moreover, capital centralization and bank merger means greater stability of the financial system, which is of paramount importance as well.

What changes will bank merger bring about in the banking system and what opportunities will it afford?

It is a positive step in the context of the economic system’s stability. On the other hand, it will enable us to reduce the amount of nonoperating assets and loan interest rates. At present, it is a major problem. Although the Central Bank reduced the refinancing rate, commercial banks did not considerably reduce their interest rates last year as they believed risks were too high. Consolidation of capital will resolve these problems as well.

Betghehem Arabyan





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