action to emergency situations. A system was introduced to assess risks spilling over to the financial system from external and real sectors, through macro-prudential analyses (quantitative methods, stress tests). The crises management concept and systemic bank disclosure methodology were developed and are currently in use. A concept of introducing the new Basel Principles (Basel 3) was developed in order to align the regulatory framework of the Armenian banking system with internationally accepted principles. Work to implement a new model (risk-based supervision) is underway. The joint World Bank and International Monetary Fund team also conducted an assessment of the financial system of Armenia under the Financial Sector Assessment Program in 2012, which marked notable improvements and progress in the field of regulation and supervision of the financial system compared to the 2005 assessment. In particular, the latest assessment indicates that the financial system of Armenia meets the abovementioned principles by nearly 93% which means the country fits the ranking as compliant or largely compliant. A timetable of implementation of the framework Solvency 2 in the Republic of Armenia was developed and approved. The relevant works for the organization of the timetable indicated events have begun; most particularly the “Non-Life Underwriting Risk Assessment Manual” has been developed and is currently on a pilot stage. In 2012, the total evaluation of Electronic Payment System of the Central Bank in accordance with international principles, set by the Bank for International Settlements, was completed. Based on the results of the evaluation, the EPS has been estimated to be reliable and risk-free in the financial stability aspect. These evaluation results also served a basis for the World Bank activities conducted under FSAP in 2012. 2. Main development goals Develop a financial stability framework to ensure effective systems and procedures are in place for evaluation of potential risks that pose threat to financial stability, and for crisis management. Establish a sustainable framework of regulation and supervision in line with best international experience and principles that would be the best combination of financial system risks management (ensuring stability) and current developments. Implement reforms under a single financial system development philosophy to ensure tantamount and balanced development of financial institutions, financial markets and financial infrastructures concomitant with increasing financial intermediation. Continue actions toward introduction of advanced bank regulation and supervision standards, specifically new Basel principles, risk-based forwardlooking supervision, consolidated supervision of financial institutions, improve the reporting system and the