slide1
Download
Skip this Video
Download Presentation
POST-CRISIS OPPORTUNITIES FOR CENTRAL ASIAN BANKS

Loading in 2 Seconds...

play fullscreen
1 / 9

POST-CRISIS OPPORTUNITIES FOR CENTRAL ASIAN BANKS - PowerPoint PPT Presentation


  • 249 Views
  • Uploaded on

POST-CRISIS OPPORTUNITIES FOR CENTRAL ASIAN BANKS Presentation of Istvan LENGYEL Secretary General Banking Association for Central and Eastern Europe CENTRAL ASIAN BANKS AND THE CRISIS Two very different patterns of pre-crisis development

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'POST-CRISIS OPPORTUNITIES FOR CENTRAL ASIAN BANKS' - adamdaniel


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1
POST-CRISIS OPPORTUNITIES FOR CENTRAL ASIAN BANKS
  • Presentation of Istvan LENGYEL
  • Secretary General
  • Banking Association for Central and Eastern Europe
central asian banks and the crisis
CENTRAL ASIAN BANKS AND THE CRISIS
  • Two very different patterns of pre-crisis development
  • Kazakhstan: excess to large-scale foreign funding of the largest banks, boorowing-driven aggressive strategies, high loans-to-deposits ratio (at the peak over 200%, very high pre-crisis growth rates (2006: +96% p.a.)
  • Other Central Asian countries:Lower growth rates, more limited access to foreign borrowing, lower LTD (Kyrgyzstan - September 2008: 104%)

BUT: SUBSTANTIAL DIFFERENCES BETWEEN COUNTRIES BELONGING TO GROUP 2 (Kyrgyzstan, Tajikistan, Turkmenistan)

central asian banks and the crisis3
CENTRAL ASIAN BANKS AND THE CRISIS
  • LESSONS OF THE CURRENT CRISIS
  • MACROECONOMICS: in this crisis, countries with more closed economies were hit less

BUT

  • indirectly (through decreasing workers’ remittances, export earnings) the crisis also reached relatively closed economies

- BANKING SYSTEM: relatively small size of the banking system was another advantage

  • banks relying more on domestic funding suffered less

BUT

  • international turbulences, fear of problems in banks also spread to banks which seemed to be relatively isolated from world financial markets

DECISIVE ROLE OF THE STATE AND BANK REGULATORS IN AVOIDING LARGE-SCALE PANIC

what have we learnt hopefully
WHAT HAVE WE LEARNT (HOPEFULLY)?
  • Modern world is highly interconnected and interrelated
  • Information spreads with incredibly high speed (Is Hungary the next Iceland?)
  • Events are driven by correct or incorrect information
  • Markets are driven by greed and fear
  • Markets are not efficient
  • Self-regulation does not work
  • Deregulation creates new bubbles (is China the next one?)

STILL

With proper policies, financial discipline and self-restrict of foreign borrowing, countries may counter-balance market forces

perspectives of central asian banks
PERSPECTIVES OF CENTRAL ASIAN BANKS

STRATEGIC STARTING POINT – WHERE SHOULD WE GO?

  • Classical principles of banking are not dead
  • The crisis was the result of ignoring these principles
  • Learning process by CEE/CIS banks should not stop

BUT

Critical understanding of Western banks’ experience is needed

Western banks should also learn from us

perspectives of central asian banks6
STRATEGIC PROBLEMS AND POSSIBLE ANSWERS

LOW CAPITALISATION

2. LACK OF LONG-TERM FUNDING SOURCES

Recapitalisation from domestic sources, state intervention, foreign ownership

INCREASED ROLE OF INTERNATIONAL FINANCIAL INSTITUTIONS

Pension reform, life insurance, Bausparkasse system

IFIs, intergovernmental funds

PERSPECTIVES OF CENTRAL ASIAN BANKS
perspectives of central asian banks7
3. EXPENSIVE DOMESTIC FUNDING

4. LOW PROFITABILITY, DIFFICULTIES IN BUILDING UP CAPITAL, INVESTING IN BRANCH NETWORK DEVELOPMENT, IT AND OTHER SYSTEMS

5. LACK OF TAILORED DEPOSIT AND LOAN PRODUCTS

6. LOW LEVEL OF RISK MANAGEMENT

Proper macroeconomic policies, reasonable budgetary policy, support of savings, deposit insurance

Cheaper funding, cost-efficiency, control over asset quality, training

Product development, training

Investment in RM, staff training

TRAINING OF THE MANAGENT AND THE SHAREHOLDERS

PERSPECTIVES OF CENTRAL ASIAN BANKS
perspectives of central asian banks8
PERSPECTIVES OF CENTRAL ASIAN BANKS
  • TRAINING IS OF KEY IMPORTANCE IN DEVELOPING THE BANKING SECTOR IN CENTRAL ASIA
  • A CRITICAL APPROACH IS NEEDED
  • THE GOAL OF THE TRAINER SHOULD BE TRANSFER OF EXPERIENCE, KNOWHOW AND KNOWLEDGE ALWAYS TAKING INTO CONSIDERATION LOCAL EXPERIENCE AND KNOWLEDGE

(Should ex-Lehman bankers teach risk management?)

summary
SUMMARY

CENTRAL ASIAN BANKS HAVE UNIQUE OPPORTUNITIES OF DEVELOPMENT

THEY MAY AVOID REPEATING PROBLEMS COMMITTED BY THEIR PEERS IN THE REGION AND IN THE WEST

TO REALIZE GROWTH OPPORTUNITIES, SUPPORT OF THE GOVERNMENT, THE CENTRAL BANK AND INTERNATIONAL FINANCIAL INSTITUTIONS IS NEEDED

BANKS SHOULD INVEST (MAYBE JOINTLY WITH THE GOVERNMENT) IN THE EDUCATION OF CLIENTS

CLOSE CO-OPERATION WITH THE PRESS IS ALSO NEEDED TO PROVE THAT

BANKS ARE SOCIALLY USEFUL, RESPONSIBLE INSTITUTIONS!

ad