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21.Oct .2020 20:00

Koba Gvenetadze considered 3 challenges for the financial sector amid Covid-19

Koba Gvenetadze considered 3 challenges for the financial sector amid Covid-19
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Koba Gvenetadze participated in a Meeting of the Governors Central Banks of Middle East and Central Asia with the Initiative of the International Monetary Fund (IMF).

Koba Gvenetadze noted, Georgian financial sector met the pandemic crisis well prepared as a result of the implemented reforms. According to him, the sector had necessary capital, liquidity buffers, high asset quality and historically low rates on non-performing loans.

However, Koba Gvenetadze considered 3 challenges for the financial sector amid Covid-19.

“We have faced several challenges due to the pandemic:

First - we knew the banking sector was healthy, but the magnitude of the shock was unclear.

Second - there was a confidence shock on the market, which could slow down lending to the economy and intensify the shock.

Third - there was a high operational risk, which was related to the indefinite pace of pandemic development, lockdown, and consequently, human resource constraints for both the regulator and the financial sector.

In response to these challenges, we have developed a temporary plan that has allowed lenders to defer significant amounts of loan during the lockdown," Koba Gvenetadze noted in his speech at the meeting.