Meeting of Bankers with Head of Financial Markets Control House Does Not Answer Questions

The Financial Markets Control House, as a "lightning rod" of the crisis, is unable to influence the situation, which was shown by the meeting of the Chairman of its Board of Directors Rufat Aslanli with shareholders and managers of local commercial banks.

The talks the day before, which were initiated by the Association of Banks of Azerbaijan, revealed tender points, which led to the collapse of the system, but the answers to these questions were not given. The result was the ascertaining of the need for regular meetings, but no more.

As the Director of IJS Law Firm Akram Hasanov told Turan, the House has no right to speak as regulator, because they do not have adequate resources, not only at the CBA level, but even at the level of the deposit insurance fund. In addition, this legal entity of public law has already made a series of miscalculations, violating the rights of citizens, initially by introducing a ban on bank loans in foreign currency, and then prohibiting financial and credit institutions to issue loans to pensioners. But the scope of the consumer credit (40% of the loan portfolio of banks) was frozen because of the actual refusal of the credit and financial system of credits in AZN. "Have pensioners generated overdue loans of 1 billion 314.6 million AZN? Even laymen have a lot of questions for a total ban of foreign currency lending. The main reason that forced the House to make this decision was the incomplete transfer of the powers of the Central Bank to the new supervisor who is in the process of creation. There is a procedure of reception and transmission of documents, pending the results of various analyses and the results of monitoring by the Central Bank, acting since 1992.

The very same FMCH is far from full capacity management and supervision, and dollar loans provide a lot of inconvenience to it, although banks would like to continue this practice. Even if you want to arrange a loan in manats, private banks do not have the sufficient resources, and the CBA management suppresses access to the national currency, for fear that banks will exchange it for dollars, leading to a consequent loss of their own foreign exchange reserves. In addition, the massive demand for dollars will lead to further decrease in the AZN rate, while the Central Bank accepts that, keeping AZN afloat with the help of the artificially created shortage of AZN. That is, as you cannot afford to buy dollars, the problem is eliminated; get the almost steady rate with not sharp, but gradual depreciation of the national currency," said the expert, referring to the absence of the real economy and full control over the financial system. --17D-