NBU to resume annual stress tests in 2021, to set terms for restoring capital buffer – Financial Stability report

The National Bank of Ukraine (NBU) will resume annual stress tests of banks in 2021 and set terms for restoring the capital buffer, according to the Financial Stability report for December 2020.

"At the same time, in 2021, the NBU will resume the practice of annual regular stress test," the report said.

At the same time, during the first half of 2021, the NBU will decide on the schedule for banks to form capital buffers, taking into account the state of the banking system and the macroeconomic situation, whereas earlier the central bank announced such a decision in the first quarter of next year.

According to the report, buffers of capital conservation and systemic importance were introduced at the beginning of the crisis, which should allow using capital in excess to absorb possible losses and increase loan portfolio. The decision on the timing of the restoration of the buffers will be made only in 2021, taking into account the state of the economy after the crisis, and provides for a long period of their construction. Therefore, now banks have the opportunity to flexibly use the equity capital formed before the crisis, the document says.

Source: www.en.interfax.com.ua