Agency News / 02.02.2012

Central Bank completes formulating rating requirements to depositories to store securities of banks

The formulation by the Bank of Russia of a package of rating requirements to depository institutions holding the banks’ securities is near completion, the Kommersant informed.

As the paper stated, proceedings of the session of the Central Bank’s Board of Directors due February 3 contain a list of national rating agencies and indicate the rating level depository institutions are expected to reach pursuant to guideline 2732-U “Particularities of creating provisions against possible losses on operations with securities”. Earlier, the bank specified the minimum levels as per international rating agencies.

The minimum acceptable rating level as per the Central Bank is ‘A’ for AK&M Rating Agency, Expert RA and NRA, ‘BB’ for RusRating, ‘’ for Moody’s Interfax.

Therefore, the Central Bank will recognize not only depository institutions for securities possessing depository rating at least A+ by the international rating company Thomas Murray and internationally rated at least ‘B’ by Fitch Ratings and S&P or ‘B2’, by Moody’s, but also depository institutions rated by national agencies as reliable.

Earlier, the Central Bank permitted to consider the rating score as one of the possible criteria when estimating the reliability of a depository institution. Other criteria are: capital adequacy (at least RUB 250 million), or professional experience of the depository institution (at least five years). If the depositary institution fails to meet any of these criteria, the bank intending to have its securities stored at such institution is required to create a 100 per cent provision on them, actually defeating the purpose of such storage, the newspaper points out.

Today, about half of the 700 depositaries currently active in the market do not meet the applicable requirements in the way of capital and experience, experts believe.