ECB, Bank of Russia launch supervision, auditing programme

ECB, Bank of Russia launch supervision, auditing programme
AFP - Thursday, March 20 05:30 pm

FRANKFURT (AFP) - The European Central Bank launched a three-year programme with the Bank of Russia Thursday aimed at boosting cooperation in bank supervision and auditing.

"The banking supervision component of the programme will aim at enhancing the institutional capacity of the Bank of Russia to maintain the stability of the Russian banking system," an ECB statement said.

It was to focus on helping Russian banks meet so-called Basel II criteria that are designed to improve the consistency of capital reserve rules and promote better risk-management practices by global banking institutions.

"The internal audit component of the programme will aim to support the Bank of Russia's risk-based internal audit function, through training by and consultations with the experts of the Eurosystem" of eurozone central banks, the ECB added.

ECB vice president Lucas Papademos noted that "the financial market turmoil that emanated from the US subprime mortgage crisis has highlighted, among other things, the importance of transparency and of sophisticated and effective risk management standards and practices in banks.

"In today's world, central banks also need modern and sophisticated internal audit procedures," he added.

The European Union has provided a grant of three million euros (4.6 million dollars) for the programme within the framework of a EU-Russia cooperation accord.

"Russia and the European Union are important partners," Papademos stressed.

"One key aspect of the partnership is the overall objective of the European Union and the Russian Federation to enhance the regulation, supervision and governance of financial markets in Russia."