OREANDA-NEWS. The Bank of Russia Governor Elvira Nabiullina held a meeting with heads of banking associations and major banks on compliance of Russian banking regulation with Basel standards taking into account the interim results of the inspection conducted by the Basel Committee on Banking Supervision (Regulatory Consistency Assessment Program - RCAP).

The meeting discussed some amendments to Russian banking regulation, in particular:
- refusing to include subordinated futures in the additional capital calculation, except for those the funds on which were raised before 1 January 2013;
- recognising credit claims to the Russian Federation, constituent territories, the Bank of Russia as zero-risk claims provided that they are denominated in rubles;
- excluding preferential approach to risk assessment with regard to claims to the companies, which are natural monopolies, and central banks, governments and banks of the CIS countries with country assessment 7;
- substituting the risk weight of 1,000% for 1,250%;
- applying lower risk weights to secured credit claims provided that the currency of claims and the currency of security coincide, including repos;
- full coverage of junior-tranche bonds with capital under securitisation transactions;
- applying liquidity coverage ratio (LCR) as a prudential ratio set for systemically important banks in compliance with Article 57 of the Federal Law 'On the Central bank of the Russian Federation (Bank of Russia)' from 1 January 2016. Moreover, starting from 1 January 2016 internationally recognised approaches to liquidity risk management provided for in the BCBS document 'Principles for Sound Liquidity Risk Management and Supervision', 2008, will be introduced with regard to the said systemically important banks.

According to Bank of Russia estimates, the amendments proposed to the banking regulation system will not affect bank capital adequacy. According to statements as of 1 September 2015, the capital adequacy (N1.0 ratio) stands at 12.9% with the minimum value of the ratio being 10.0%.

In order to ensure bank lending to the economy and develop its socially important segments the Bank of Russia is considering implementation of the following regulatory measures from 1 January 2016:
- to reduce risk weight with regard to credit claims to small businesses complying with the minimum Basel requirements to 75%;
- to reduce risk weight with regard to housing mortgages (with due account of the criteria established by the Bank of Russia) to 35%.

Besides, the Bank of Russia deems it possible to reduce the values of common equity and total capital adequacy ratios to the levels provided for in the BCBS standards, i.e., to 4.5% and 8% respectively (currently 5.0% and 10.0%).