YEREVAN. - Armenia will tighten control over interrelation of banks and other financial organizations. The corresponding changes have been included in the Draft Law on Banks and Bank Activity, as well as the package of accompanying bills discussed in the Armenian parliament today.  

The draft law proposes to register the interrelated financial organizations and follow that the risks of one of them “contaminate” the other one as little as possible.

Hence, the Council of the Central Bank of Armenia (CBA) will set normatives for the general capital and its adequacy, liquidity, currency management the same way as it used to do for banks and other financial organizations.

The risk “ceiling” of a financial group for one loan debtor and transactions inside the group will also be set.   

Precise interrelation criteria haven’t been established, since in separate cases even small shareholders will have significant impact on the decision-making.  

Therefore, in every individual case the CB Council will decide on the interrelation of the organizations according to the method of Basel principles and other standards.