Statement of the National Bank of Georgia
12 September, 2016
Regarding to the discussions about banking sector
arrangements, the National Bank of Georgia announces, that negotiations between
the parties are confidential and NBG is not eligible to disclose the details of
the particular transaction. In addition, for the purpose of making a decision,
NBG, within its authority, takes into account market competition and its
mandate to support stable and effective functioning of the financial system and
to protect customers' and investors' rights. In this regard, it is important
that not having barriers to entry into the banking sector promotes free
movement of investments and reduces the costs of capital, which consequently
improves effective functioning of financial system.
While analyzing any particular transaction, taking into account the possible impact on competition, as well as effectiveness of financial system and protection of customers' and investors' rights, are very important. Small size of the market is also taken into consideration, as according to the international practice, consolidation is one of the means to achieve effectiveness. In addition, economy of scale and growth of effectiveness promotes the decrease of interest rates.
It is noteworthy, that within the framework of risk-based supervision, NBG continuously analyzes the aforementioned issues, and they are discussed in NBG's Annual Reports.
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