Supervisory standards
While performing their activities, banks are obliged to comply with the existing supervisory standards that are implemented for the purpose of limiting the banks’ risk exposure. The supervisory standards established and implemented by the National Bank are derived from the Basle Committee’s principles and the European Directives. The most important standards implemented by the National Bank are:
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capital adequacy, i.e. maintenance of an adequate capital base that will enable covering of the risk profile of banks. The capital adequacy ratio calculated as a ratio between the bank’s own funds and its risk weighted assets, must not be lower than 8%;
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criteria for classification of on-balance and off-balance sheet asset items of banks according to their risk level and determining adequate amount of impairments and special reserves for coverage of the banks’ potential and/or established losses;
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exposure limits as a ratio between the total on-balance and off-balance sheet exposure to a single persons and group of connected persons and the bank's own funds;
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limits of exposure to the FX risk and the manner of managing this type of risk;
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limits on investments in land, buildings, equipment and equity holdings.
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