Managing Financial Sector Risks from the COVID-19 Crisis in the Caucasus and Central Asia

support for lending and loan guarantees, and lowering the cost of re-financing. The Central Banks of Azerbaijan and Georgia opened a bilateral swap line with the European Bank for Reconstruction and Development. Central banks in the region have also loosened their macro-financial stance. They have relaxed counter-cyclical capital requirements (Azerbaijan, Kazakhstan) while also relaxing liquidity ratios (Kazakhstan, Kyrgyz Republic), capital adequacy requirements (Armenia, Azerbaijan, Kazakhstan), other macroprudential policies, and, in some countries, loan classification and provisioning rules (Kazakhstan, Kyrgyz Republic). These measures have managed to stifle negative macro-financial feedback loops and to avoid widespread bankrupt-cies that could have amplified the impact of the crisis.