New regulatory framework for market risk management in banks approved

13-01-2026

13 January 2026, Baku: Based on the Financial Sector Development Strategy for 2024-2026, the Regulation for Market Risk Management in Banks (the “Regulation”) was approved by the Management Board of the Central Bank of the Republic of Azerbaijan on December 23, 2025. This was done to strengthen financial stability in the banking sector and increase compliance with international regulatory standards.

In addition to aligning with Basel III standards, the new regulatory framework sets forth consistent and progressive requirements for identifying, measuring, monitoring, and managing market risks within banks.

The regulation stipulates requirements for the market risk management system, policies and regulations in banks, methods for measuring risks for different types of market risk (interest rate, currency, equity and commodity risk), and it outlines monitoring and reporting procedures. It will also allow for the more accurate identification and measurement of interest rate, currency, equity, and commodity risks. Additionally, it will provide advanced approaches for managing interest rate risk in the banking book (IRRBB). These changes will strengthen the banking sector's resilience against potential losses from market changes.

The full text of the rule can be found via the link below:

https://e-qanun.az/framework/61170