CHALLENGES AND OPPORTUNITIES OF SECURITIZATION IN ARMENIA'S BANKING SYSTEM
DOI:
https://doi.org/10.46991/BYSU.G/2024.15.2.084Keywords:
NPLs, Mortgage Loans, Securitization, Bazel II and III, Banking systemAbstract
Securitization and bond markets are integral to modern finance, providing liquidity and risk-sharing mechanisms. Mortgage bonds, covered bonds, and securitizations differ significantly in their structure and regulatory oversight. These differences have profound implications for financial stability, particularly in smaller or emerging economies. This article examines these distinctions, focusing on their regulatory frameworks and financial stability impacts. The Armenian banking sector plays a pivotal role in supporting economic development by providing credit to businesses and individuals. Over the past two decades, the composition of loan portfolios in Armenia has undergone significant changes, reflecting broader economic trends, policy decisions, and market dynamics. This article explores key aspects of Armenia's loan portfolio distribution over the last 20 years, focusing on non-performing loans (NPLs), the role of mortgages, and loans relative to GDP. Additionally, it evaluates potential risks to the financial system and provides recommendations for mitigating these risks.
References
Basel Committee on Banking Supervision. “Basel II: International Convergence of Capital Measurement and Capital Standards: A Revised Framework.” Bank for International Settlements, June 2004, pp. 23-37.
Basel Committee on Banking Supervision. “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems.” Bank for International Settlements, December 2010 (revised June 2011), pp. 45-67.
Central Bank of Armenia. “Annual Financial Stability Report.” Central Bank of Armenia, 2022, pp. 12-25.
Central Bank of Armenia. “Regulatory Requirements and Their Application in the Armenian Financial System.” Central Bank of Armenia Publications, 2021, pp. 18-30.
International Monetary Fund. “Global Financial Stability Report.” IMF Publications, October 2023, pp. 110-120.
Central Bank of Armenia reports (2022, 2023) and financial analysis of the Armenian banking sector.
S&P Global. Introduction to Covered Bonds and Their Regulatory Frameworks.
IMF. Global Financial Stability Report: Restarting Securitization Markets.
World Bank data on Armenia's loan-to-GDP ratio and financial sector trends.
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