Central Bank unveils ‘Banking sector’s macroprudential policy framework’

19-12-2024

19 December 2024, Baku: The Central Bank regulates and supervises the banking sector and pursues the macroprudential policy to safeguard financial markets’ stability and resilience. The Bank has developed the best practices based ‘Banking sector’s macroprudential policy framework’ to enhance and expand the communication of the macroprudential policy framework.  The paper encompasses end and interim objectives of the policy, its application directions and process, institutional design, communication, as well as interaction with other policies.

The primary objective of the macroprudential policy is to maintain financial stability and boost its resilience by eliminating the accumulation of systemic risks. The financial sector resilience and stability is considered the key prerequisite for long-term sustainable economic growth. The framework document outlines five interim objectives to achieve the goal.

In line with international practices, the macroprudential policy is continuously adjusted to new challenges and risks. So, the paper provides information on macroprudential policy tools likely to be applied in future along with those currently in use by the Central Bank.

The framework was discussed and approved during the Monetary Policy and Financial Stability Committee meeting in December 2024 (Protocol Decision No. 12) and is now publicly accessible.