Marchenko says Level of Foreign Capital in Kazakhstan's Banks acceptable
At a meeting with students, Chairman of the National Bank Grigory Marchenko announced that the current share of foreign capital in Kazakhstan’s banks is within normal limits.
He said that the optimal level of foreign capital in the banks and financial institutions of the country should be between 30 and 40%.
If the share reaches 70%, it would pose great risks during an economic crisis.
Chairman, Kazakhstan National Bank Grigoriy Marchenko, said, “If the situation change, and (foreign capital levels – KNL) start to increase, we must restore the norm as stipulated by legislation. This means, if the share of foreign capital exceeds 50%, we should stop providing licenses.”
Answering questions from students as to which investment instruments the National Fund is now using, Mr. Marchenko noted they give preference to foreign markets.
It is useless to invest money inside the country, since the market does not face a liquidity deficit. The National Bank plans to transfer the administration of 50 to 100 million US dollars from the National Fund to a foreign company.
Currently, the NBK is considering applications from international investors. The National Fund holds nearly 26 billion US dollars.
Marchenko said, “We will place 40% of the money in the USA and Canada, 40% in Western Europe and 20% in Asian countries such as Singapore, Japan, Hong Kong, Australia and New Zealand. Unlike Abu Dhabi and Norway, we are not purchasing securities from South Korea or Brazil. 15% of the provident foundation is invested in the shares of these countries.”
Talking about a probable decrease in the level of the insurance on individual banking deposits in 2012, Marchenko noted the level may drop to 3 or 2.5 million tenge, or will stop at 5 million, according to Caspionet.