The Bank of Russia will limit the risks of banks' investments in immobilized assets. This is reported on the regulator's website.
The Central Bank has prepared a methodology for calculating the concentration of immobilized assets. It is planned to introduce an indicator of the concentration of immobilized assets – a risk-sensitive limit. The bank will have to cover with capital the immobilized assets exceeding the risk-sensitive limit. As a result, the risks of excessive investments in such assets will be shifted from depositors and creditors to the bank's shareholders.
The regulator has developed a draft regulation defining the methodology for calculating the risk-sensitive limit. The draft provides for the classification of immobilized assets by banks into one of three groups with an immobilization coefficient from 1 to 3, depending on the riskiness of the asset (its type, liquidity, and duration on the balance sheet).
The maximum value of the risk-sensitive limit indicator is set at 25% of the banks' capital. At the same time, the project introduces a 5-year (from 2027 to 2031) phased schedule (100-85-70-50-25%) for reaching the target level of the risk-sensitive limit.
Immobilized assets are non–core assets that have no repayment requirements, are illiquid, and carry shareholder risks. These include investments in property, excess fixed assets, and ecosystems.
