2002年-世界发展银行全球_Financial_Sector_Assessment___Georgia_13页_1mb

Financial Sector Assessment of Georgia (March 2002)

Core Content

This document provides an assessment of Georgia's financial sector as part of the Joint IMF-World Bank Financial Sector Assessment Program (FSAP). It outlines the current state of the banking system, the legal and regulatory framework, and the macroeconomic context influencing the sector. The report also highlights vulnerabilities, risks, and areas for improvement.

Main Views

Banking System Overview

• The Georgian banking system is relatively small, with total assets amounting to 12% of GDP as of 2001.
• There are 29 licensed banks, with the top ten banks holding 83% of total assets and the three largest banks holding about 42%.
• The system is vulnerable to macroeconomic shocks, particularly exchange rate fluctuations, which can increase non-performing loans and lead to insolvency.
• The system is moderately concentrated, with most banks based in Tbilisi.

Financial Intermediation and Risks

• Financial intermediation is limited due to a lack of bankable projects and high lending costs.
• Banks face challenges in mobilizing deposits and enforcing loan contracts.
• Public confidence in the banking system is low, as most transactions occur in cash and the legal framework for collateral enforcement remains weak.
• The low level of financial development contributes to high intermediation costs.

Regulatory and Supervisory Framework

• The National Bank of Georgia (NBG) has made progress in implementing banking regulations and improving the legal framework.
• New asset classification and provisioning regulations were introduced in January 2001, which led to significant changes in the reported capital adequacy and liquidity ratios of banks.
• The NBG's ability to act as a lender of last resort has been enhanced, but its procedures are not fully consistent with international standards.
• The NBG has been working to strengthen its independence in regulating and supervising banks, but some key provisions were removed during legislative reforms.

Compliance with International Standards

• The NBG has made substantial progress in compliance with the Basel Core Principles (BCP), but several areas still need improvement.
• The legal framework for anti-money laundering and "know-your-customer" policies was not in place at the time of the FSAP mission, but a draft law was introduced in late 2001.
• The NBG has been advised to adopt a more proactive role in the development of payment and settlement systems and to align with the CPSS Core Principles.

Macroeconomic Context

• Georgia's economy experienced hyperinflation and a sharp decline in output in the early 1990s, but stabilized and grew at an average of 6% annually from 1995 to 1999.
• Inflation was reduced to below 10% per annum, but real GDP per capita in 2001 was still less than half of what it was in 1989.
• The government's fiscal position remains weak, with low tax revenue as a share of GDP and high public debt.
• The banking system is highly dollarized, with about 80% of deposits and loans denominated in USD, increasing vulnerability to exchange rate shocks.

Key Information

Near-Term Vulnerabilities

• Monetary Policy: The NBG maintains a floating exchange rate, but the rate has been relatively stable (USD 2.00 to 2.10) since mid-1999. However, high dollarization and low monetization limit the scope for active monetary policy.
• Banking System Performance: Despite wide interest rate spreads, banks have not been profitable due to loan-loss provisioning. The new asset classification and provisioning regulations significantly reduced capital adequacy ratios and increased the proportion of classified loans and non-loan assets.
• Stress Tests: The NBG conducted stress tests showing that a 35% depreciation of the GEL and a 5% increase in interest rates could lead to insolvency for a significant portion of the banking system, especially in a worst-case scenario.
• Exit Strategy: The NBG has improved its ability to resolve problem banks, but the process is not fully transparent. Deposit freezes and inconsistent implementation of procedures have undermined public confidence.

Medium-Term and Developmental Issues

• Capital Markets: The Georgian Stock Exchange is small and illiquid, with the majority of trading volume consisting of bank shares. The National Securities Commission has been established, but the market remains underdeveloped.
• Insurance Sector: The insurance market is small and underdeveloped, with gross premium income of about US$7 million in 1999. Supervisory practices need to be improved.
• Payment Systems: The NBG lacks a strategic vision for payment and settlement systems and does not fully comply with the CPSS Core Principles.
• Corporate Governance: Corporate governance in Georgia is weak, with inadequate protection of shareholders' rights and opaque financial statements. Legislative reforms and stronger enforcement are needed.

Legal and Institutional Reforms

• Amendments to banking legislation were approved in October 2001, enhancing the NBG's regulatory and supervisory powers.
• The NBG has taken steps to improve its supervisory capabilities and reduce legal challenges to its decisions.
• The introduction of International Accounting Standards (IAS) has been mandated, but some banks are struggling with the transition.

Conclusion

The Georgian financial sector is at an early stage of development, with significant vulnerabilities and challenges in terms of stability, transparency, and resilience. While the NBG has made progress in improving the regulatory and supervisory framework, further reforms are needed to address weaknesses in the legal system, enhance market discipline, and improve the infrastructure of the financial system. Strengthening the banking system and promoting financial development are essential for sustainable economic growth in Georgia.