Part of the cost of the activities of the stress assets fund will be transferred to commercial banks

/INTERFAX-KAZAKHSTAN, Astana, October 15, 08/ - Second-tier banks in Kazakhstan will share the risks and costs associated with the stress assets fund, the Deputy Chairman of State Agency on Financial Supervision (AFN), Murat Baysynov informed. "The changes to the law on banks and banking activities in connection with a government decision to create a stress assets fund are proposed. So that the banks should share the responsibility and costs they will participate in the activities of the fund by buying shares to divide the possible losses in the fund, "- he said at the plenary session of Mazhilis on Wednesday in Astana, during which amendments in two readings to the legislation on the sustainability of the financial system were approved. In particular, he said, banks should be involved in the formation of the authorized capital of the fund. As reported in July, Prime Minister of Kazakhstan Karim Masimov instructed the leadership of the Ministry of Finance, Economy and Budget Planning, National Bank and the State Agency on Financial Supervision to consider the possibility of establishing a stress assets fund. In September, the head of the Ministry of Finance Bolat Zhamishev said that future stress assets fund is planned to capitalize at the expense of budgetary funds amounting to $ 1 bn. and attract approximately $ 5 bn. of private investment. In addition, AFN vice-chairman at the same plenary session of Majilis reported that the draft law on amendments and additions to legislation on sustainability of financial system identified a possible mechanism to provide financial assistance to government banks where necessary "by entering the capital of the bank." "If the bank has problems and needs support, the Government would not ask for the consent of the shareholders of the Bank to include in its authorized capital", - said M. Baysynov. But he noted that "the required amount of injections" will be determined by the Government in consultation with the authorized body. "These shares in such a situation will be handled by the Government or by state holding, which will be determined by the Government for this purpose" - said AFN vice-chairman. [2008-10-16]