УДК 336.71
DOI: 10.36871/ek.up.p.r.2024.02.05.007

Авторы

Gunay Guliyeva,
Azerbaijan State University of Economics (UNEC), International Economics
Ayaz Museyibov,
PHD candidate at Azerbaijan State University of Economics (UNEC), The instructor of Azerbaijan Technical Univeristy

Аннотация

The main purpose of the research is to assess the current state of the transition to Basel III standards in Azerbaijan, to assess the level of readiness of the banking sector for the transition process, and to assess the potential costs and benefits. Conducting a multifaceted methodology, the research incorporates both qualitative and quantitative methods such as comparative analysis of legislation, the Herfindahl-Hirschman Index (HHI) method, calculation of compliance costs, expert interviews, a decade-spanning analysis of the sector’s development, and a thorough deployment of descriptive statistics. The unique challenges and approaches are also addressed in developing countries like Azerbaijan where the leading global trends differ significantly. The emphasis here is on the knowledge of how Basel III criteria influence the banking industry in Azerbaijan with regard to both technical demands and regulative realities. The research indicated that though the requirements implemented under Basel III suggested enhancement of bank capital quality and risk management, there were also challenges associated with this approach including higher costs for regulatory compliance and capability restrictions on performing operations. As the main result of the research, it should be noted that important reforms were carried out in Azerbaijan in the direction of the transition to Basel III standards, the capital adequacy indicators of the Azerbaijani banking sector are lower than Basel III standards in terms of quality of assets and capital, however, quantitatively is higher than the requirements of Basel III. Nevertheless, research show that there are serious differences in the banking sector terms of capital, while some banks have a high level of capitalization, some have very low capital adequacy indicators. Based on our calculations based on Cook ratio, banks need additional capital in the amount of 44 million manat (25,8 million USD, 1% of the total capital of the banking sector, 0.03% of GDP) to meet the Basel III standards on total capital adequacy ratio alone.

Ключевые слова

Basel III Standards, Azerbaijani Banking Sector, Financial Stability, Regulatory compliance, Economic Implications.