Publication: Financial Sector Assessment : Armenia
The Armenian financial system is quite small, with the assets of the banking system (by far the largest component) accounting for only 15 percent of gross domestic product (GDP). The banking sector has not yet reached the level of consolidation and sophistication of the more advanced transition economies, and intermediation costs are high. The results of the stress tests show that the banking system is significantly exposed to a combination of credit and foreign exchange rate risks, but only moderately exposed to interest rate risks. The legal framework governing the financial sector in Armenia is reasonably sound and comprehensive, but decisions by the Central Bank of Armenia (CBA) to withdraw banking licenses and or to initiate bankruptcy proceedings against banks have been successfully appealed in the courts. The authorities have agreed that the law on joint-stock companies should be replaced as soon as possible, and supplemented by a law on limited liability companies. Many of the Basel core principles are largely complied with, but banking supervision needs to be strengthened to bring it more closely into line with international standards.
“World Bank. 2001. Financial Sector Assessment : Armenia. © Washington, DC. http://openknowledge.worldbank.org/handle/10986/15953 License: CC BY 3.0 IGO.”