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Central bank to regulate banks' investments in ecosystems
The Bank of Russia presented for discussion with the market participants a report that proposes a flexible approach to the regulation of ecosystem banks as the optimal one.
Allowing lenders and their clients to benefit from the ecosystem development, this approach will simultaneously limit risks for lenders and depositors.
To achieve these goals, it is necessary to adjust the regulation of credit institutions’ investments in assets that do not have repayment requirements and are of limited liquidity (immobilized assets). These include ecosystem investments. It is proposed to introduce a risk-sensitive limit for such assets as a percentage of the capital. Should it be exceeded, the “excessive” immobilized assets will have to be fully covered by the bank's capital.
It is also necessary to ensure adequate assessment of ecosystem risks as part of bank capital adequacy assessment procedures. In case of a low capital adequacy, the Central Bank may establish additional requirements for capital adequacy ratios.
To limit systemic risks, some banks that develop large ecosystems can be placed into the category of systemically important corporations (SICO), even if they do not meet this criterion in terms of the scale of banking activity. In this case, a systemic importance premium of 1 percentage point will be applicable to such banks. At the same time, in some cases, differentiated (increased) markups to capital adequacy ratios may be established for SICOs, depending on the ecosystem importance.
Besides, the introduction of requirements for mandatory disclosure of information on the efficiency and key performance indicators of banks' investments in non-financial business is considered as a general measure.
Incorporation of these proposals into the regulations of the Bank of Russia will take up to two years.