Perfection of Bank Supervision Regulation’s Organization in the Process of Problem Banks’ Restructuring

I. Mekvabishvili

Over the past decade a two-stage banking system was formed in Georgia, and now it is in the process of its development’s perfection. Proceeding from the above-stated, acceleration of reformation of the monetary and credit system in conditions of transitional economy should be considered as one of the main directions for achieving economic stabilization.

We have in view the circumstance that the process of formation and perfection of the banking system in Georgia takes place in conditions of negative phenomena in the economy. Existence of an effective bank supervision system serves the purpose of holding up and avoiding of the mentioned negative phenomena.
Proceeding from the above-stated, the state program of implementation of economic reforms in Georgia should envisage:
Ï% Creation of a stable and effectively functioning banking system;
Ï% Looking for the ways of institutional arrangement of the monetary and credit system;
Ï% Parallel creation of new relations inside of the banking system, strengthening of principles of supervision and administration of the banking system by the state.
Perfection of bank supervision regulation’s organization in the process of banks’ restructuring implies: firstly, non-admission of problems for commercial banks; secondly, regulation of a bank’s monetary and credit activities, and thirdly, solving of a bank’s problems based not on theory pure “banking” but on the basis of unforeseen phenomena arising on the market determination of which beforehand is impossible.
In modern conditions of bank supervision regulation’s organization there exist certain issues that require operative deciding. In particular, it is necessary to form in banks such policies and procedures that will give banks an opportunity to adequately appraise banking risks1. We believe that all this taken into account in the process of looking for ways of perfection of bank supervision system in Georgia.