Legal Regulation of Investment Activities in the Banking Sector

Abstract

The article discusses the core legal mechanisms established by the National Bank of Georgia, including investment limits and existing risk management standards. The study highlights the necessity for regulations to be dynamically adapted to global financial standards and the principles of sustainable development. Particular emphasis is placed on the role of digital platforms, which represent one of the key factors for the future development of banks’ investment practices in Georgia. Granting credit institutions the right to place digital financial assets on investment platforms is viewed as a strategically important step toward ensuring their capitalization and further development. This would not only strengthen the financial stability of banks but also contribute to the innovative growth of the entire financial market.

The article reviews the legal regulation of investment activities in Georgia’s banking sector, with a specific focus on its role in safeguarding financial stability, protecting the interests of depositors and investors, and preventing financial crime. The analysis reflects the historical development of regulation and the mechanisms introduced by the National Bank of Georgia, including investment limits and risk management standards. Special attention is devoted to the growing significance of digital financial assets and platforms, which are becoming strategic factors in shaping banks’ investment practices and fostering innovative development within the financial market.

The study underlines the importance of dynamically aligning regulations with global standards and sustainable development principles, while at the same time ensuring a harmonious balance between banks’ private interests and broader socio-economic goals.

This multidimensional approach contributes to a deeper understanding of how effective legal regulation can simultaneously ensure financial stability and foster innovative development, which is critically important for the sustainable progress of Georgia’s banking sector.