The Central Bank of Uzbekistan has revised its regulations on risks in the banking system. What are the key changes?

The specified changes and additions have been developed to enhance the resilience of banks through effective management of existing risks within the banking system, as well as to further align risk management requirements with the "Core Principles for Effective Banking Supervision" set forth by the Basel Committee on Banking Supervision.

The document includes improved requirements for managing credit, market, and operational risks. Additionally, regulations governing the management of country risk and interest rate risk in the banking portfolio (IRRBB) have been introduced.

In particular, modifications to credit risk management clarify the responsibilities of the bank's supervisory board and detail the bank's policies and internal procedures in this area.

Definitions of banking and trading portfolios have been refined, and the specifics of managing interest rate risks associated with these portfolios have been established. Within the framework of managing interest rate risk in the banking portfolio, various types such as mismatch risk, basis risk, and optionality risk have been defined. The document also outlines methods for managing these risks and scenarios used for their assessment.

Furthermore, categories of country risks have been clarified, including transfer risk, sovereign risk, and contagion risk. Factors that banks must consider when managing such risks associated with foreign states have been identified.

The innovations also introduce the concept of operational resilience. Requirements for ensuring this resilience have been established, including the development of recovery plans and measures to ensure the continuity of banking operations.

These changes aim to enhance the risk management system in the banking sector and strengthen its resilience.