Estimated values of standard risk
Since March 1, 2019, the National Bank put in place a set of measures of macroprudential nature designed to limit systemic risks generated by the business models of banks with high appetite for risk.
The basis of this system is formed by the approach, according to which the strengthened regulatory requirements in the area of capital adequacy, build-up of special provisions to cover potential losses and allocation of the required reserves fund are applied. An excess of the interest rates on new deposits, credits and issued bonds set by banks over the corresponding estimated values of standard risk (hereinafter – the “EVSR”) is used as an indicator of the increased level of risk of the business models implemented by banks.
The EVSR are calculated by the National Bank at least once in three months on the basis of average interest rates established by the systemically important banks of Group I over the month preceding the calculation month, in terms of six financial instruments of the credit and deposit market in the national currency:
- new term revocable bank deposits of natural persons;
- new term irrevocable bank deposits of natural persons (placed for the period from 1 to 6 months (inclusively); from 6 months to 1 year (inclusively); and over 1 year); and
- new credits issued to natural and legal persons (excluding credits issued on preferential terms by the decisions of the President and Government of the Republic of Belarus, at the expense of the funds of republican government agencies and local executive and regulatory authorities).
The algorithm of the EVSR calculation is based on the arithmetic average and the degree of variation of interest rates taken into account.
The EVSR for new term bank deposits is calculated on the basis of data on average interest rates on natural persons’ new term bank deposits and used for new term bank deposits of both natural and legal persons.
According to the decision of the Board of the National Bank, since March 1, 2020 till December 31, 2020, the EVSR are on the new term banking deposits of natural and legal persons are not established and are not applied for the new term banking deposits of natural and legal persons, banks’ bonds of the new issues denominated in the Belarusian ruble.
“Average interest rate over the period of using a new credit” indicator is used when EVSR are applied for the new credits provided to natural and legal persons (excluding credits issued on preferential terms by the decisions of the President and Government of the Republic of Belarus, at the expense of the funds of republican government agencies and local executive and regulatory authorities).
Table – Values of Estimated Standard Risk, % per annum
|List of indicators||Value, % per annum|
|March 2019||April 2019||May 2019||June 2019||July 2019||August 2019||September 2019||October 2019||November 2019||December 2019||January 2020||February 2020||March - April 2020||May 2020||June 2020||July 2020||August 2020||September 2020||October 2020||November 2020||December 2020|
EVSR for new term revocable bank deposits of natural and legal persons
EVSR for new term irrevocable bank deposits of natural and legal persons placed for the period from 1 to 6 months (inclusively)
EVSR for new term irrevocable bank deposits of natural and legal persons placed for the period from 6 months to 1 year (inclusively)
EVSR for new term irrevocable bank deposits of natural and legal persons placed for the period from over 1 year
EVSR for new credits issued to legal persons (excluding preferential ones)
EVSR for new credits issued to natural persons (excluding preferential ones)