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Macroprudential regulation in banking system is the main tool of a regulator to sustain financial stability. Today the application of CAMELS model for banking system of Kazakhstan is still wide. By emergence of the model in the late 1970s in the USA, the introduction of it in Kazakhstan started from the early 2000s. Digitalization, complex financial products, operational risks, and macro-financial shocks are the main challenges to monitor and implement agile policy. The study labors grounded on data from 2015 to 2025 determine that Kazakhstan’s banking system has achieved the advancements in all macroprudential indicators of fiscal stability. The main evidence of that the prudential norm settlement that provide capital buffers to unexpected hazards, demanded liquidity level and reasonable profitability. However, the findings also reveal the threats of external environment to asset quality, indirect foreign exchange risk, and lowered financial intermediation. Today for banking risk assessment and rating Kazakhstan Deposit Insurance Fund still applies CAMELS model while supervisory standards of developed countries use forward-looking methods. Therefore, this study highlights the importance of advanced risk assessment tools that allow forward looking supervision power. The main purpose of this study to reveal the challenges for CAMELS based supervision in risk assessment and rating by adding forward-looking supervision methods. This research highlights the need for advanced supervision in terms of digitalization and rapidly changing environment. Meanwhile, this study proposes more advanced risk assessment framework rather than CAMELS Model.