CENTRALIZATION OF PROPERTY A PROBLEM FOR THE BANKING SYSTEM OF ARMENIA

ArmRadio.am
23.05.2006 13:45

“Implementation of corporative governance will make the activity
of Armenian banks more transparent and effective,” declared Vache
Gabrielyan, member of the Board of Trustees of the Central Bank
of Armenia.

Speaking at the seminar titled “The corporative governance of the
Armenian banking system.” Vache Gabrielyan said there are no strict
terms of shifting to the corporative governance system. However,
starting July 1, 2006 some new norms will come into force, which
will allow to gradually implement the corporative governance
system. Mr. Gabrielyan noted that the banking system of Armenia is
adjusted to the implementation of corporative governance.

Expert of corporative governance of the International Financial
Corporation Panos Labrapolus noted that one of the problems the
Armenian banking system faces is the extreme centralization of
property. He referred to the results of the survey among 15 banks,
according to which only two of the banks have over 20 shareholders. The
survey revealed also that only two of the banks intend to place their
shares at the stock market. According to Panos Labrapolus’s assessment,
this is not a bad index at the current stage of development of the
banking system.