Baku. 3 March. REPORT.AZ/ “In my opinion, the ongoing bank restructuring process should be implemented as soon as possible”. Mission Chief for Azerbaijan Mission at the International Monetary Fund (IMF) Mohammed El Qorchi indicated in his interview to Report.
M. El Qorchi noted that the institution he represents makes recommendations to the government : "We discussed a number of issues with the authorities related to economic and financial policies and developments. Of course, the situation of the banking sector was raised, because the current situation of some banks has implications on the country’s economy. But our recommendations are addressed to the authorities. We always make recommendation to governments. Financial Markets Supervision Authority (FMSA) has been established to deal with banking supervision and regulation of the financial sector, including bank restructuring. In my opinion, the banks that are facing financial difficulties should be restructured and the process should be completed as soon as possible. The restructuring should cover all banks, big and small, that are struggling with serious financial difficulties. Azerbaijan has already taken steps in this direction. As you know, 11 banks have been closed. And efforts to address the situation in other banks under stress are ongoing. The authorities indicated that the bank restructuring plan will be completed soon”.
According to the IMF official, unhealthy banks impact negatively confidence in banking sector: “But the government is already working on a plan to tackle these banking difficulties as soon as possible. Because the existence of deep financial vulnerabilities might have negative effects the on overall economy, it is important that the restructuring should be implemented as soon as possible. Let me reiterate that bank weaknesses, if they remain unaddressed, could negatively influence national currency rate, confidence and the overall economy. That’s why the process must be accelerated to address these problems as soon as possible. Of course the process of restructuring should be managed carefully by restructuring or rehabilitating weak banks that are viable and closing those that are not economically viable”.
“We discussed many issues in our meetings with the economic and monetary authorities, including the current developments in banking sector, the bank restructuring being conducted by government, which is expected to be implemented by the end of year, etc. Moreover, we also discussed inflation, fiscal policy, monetary policy, economic growth and structural economic reforms”, the IMF mission chief said.