The National Bank of Moldova has decided to return to the pre-pandemic capital buffer requirements for banks.
According to the National Bank, in particular, the Executive Committee of the NBM at its meeting decided to cancel the temporary measures concerning the buffer capital requirements for banks, introduced in April 2020, and return to the pre-pandemic reserve capital requirements. It should be noted that since April there have been temporary measures related to the requirements for the capital buffer, which the National Bank took in connection with the epidemiological situation in the country due to COVID-19. According to the decision of the NBM, banks were allowed to temporarily use their own funds, kept to meet the requirements for the capital conservation buffer. These measures were applied taking into account the difficult epidemiological situation caused by COVID-19 to ensure the stability of the banking sector in accordance with international support practices adopted at the EU level. This measure was aimed at supporting the trends in the financing of companies and the population by banks, ensuring a sustainable and smooth economic recovery. The NBM's decision to return to the pre-pandemic capital buffer requirements for banks was made in the context of the fact that the conditions that led to the temporary weakening of the buffer capital requirements (high risk of a significant downturn in economic activity, significant deterioration in the quality of banks' assets with a large impact on equity capital, sharp the reduction in the supply of loans from banks) were overcome, and the epidemiological situation in the country caused by COVID-19 does not pose risks that could affect the critical functions of banks. Taking this into account, it can be concluded that the necessary conditions for the cancellation of the temporary concessions granted to banks were met. As a result, banks will have to comply with capital buffer requirements and maintain a basic Tier 1 capital buffer equal to 2.5% of total exposure. As noted in the NBM, at present all banks meet the capital requirements, including the requirements for the combined buffer. // 21.12.2021 — InfoMarket
