Doing Business in Azerbaijan 2009 - Azerbaijan Export ...

112 DOING BUSINESS IN AZERBAIJAN
years were somewhat supported with foreign financial flows. As
the terms and conditions of foreign borrowing grew more stringent
in 2008, the refinancing and liquidity risks also enhanced. Banks
tended to diversify liabilities from foreign financial markets by
currencies, purchase, maturity and investors thus managing to
protect themselves against the growing risks to a certain extent.
In 2008, the banking system’s portfolio did not experience any
serious negative changes. In general, the effect of the global financial
crisis on Azerbaijan’s financial system was more psychological
urging financial institutions to redefine their development strategies.
Despite of the unfavorable surroundings Azerbaijan’s banking
system demonstrated its ability to withstand to emerging risks.
The risks spawned by the global unstable situation were substantially
mitigated by the National Bank’s (pursuant to the Referendum
Act of Marc18, 2009 with respect to amendments and changes to
the Constitution of the Republic of Azerbaijan, the National Bank of
the Republic of Azerbaijan has been renamed to the Central Bank
of the Republic of Azerbaijan since March 31, 2009) timely preventive
measures. In addition to the preserving the banking system’s
liquidity the National Bank applied more stringent monitoring of
commercial banks’ risks.
Development parameters of the banking system
Quantitative indicators of the banking system
The National Bank managed to complete the first phase of timely
preventive measures aimed at preserving the public trust in the
banking system step out of the first phase of the global financial
crisis without losses. Although the banking sector’s indicators
somewhat stabilized in 2008 as compared to 2007, the pace of
development was not high.