The EBRD is prepared to potentially fund Armenian banks to purchase local bonds, Mr Mark Davis, head of the EBRD Yerevan Office, told Armenian News – NEWS.am at the event to mark the merger of ProCredit Bank into another Armenian bank, Inecobank.

Asked about the expectations of the EBRD from the bill made by the Central Bank and submitted to the parliament - which makes it practically possible to issue mortgage-backed securities in Armenia -  he said that such financial instruments absolutely make sense.

Demand for bonds went down dramatically after the global financial crisis, but has been picking up in the last couple of years. This instrument can be very helpful if properly regulated and managed, and if received proper leverage, he added.

“We were excited about the possibility, and we are prepared to potentially fund banks to allow them to purchase bonds issued on the local stock exchange”, he said.

Responding to the question on whether there is a large enough pool of secure mortgage loans to be bundled into securities, he answered: “Absolutely, that’s why it’s an interesting instrument. It’s a small part of the overall housing stock, but nevertheless mortgage portfolio can get enough size for reasonably large bonds.”