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COMMON MARKET FOR EASTERN
AND SOUTHERN AFRICA
Seventh Meeting of the Financial System Development
and Stability Sub-Committee Meeting
3 November 2012
Nairobi, Kenya
REPORT OF THE SEVENTH MEETING OF THE
FINANCIAL SYSTEM AND STABILITY SUB-COMMITTEE MEETING
2012 - (IZ-mmn/mkc)
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A.
INTRODUCTION
1.
The 17th Meeting of the COMESA Committee of Governors of Central Bank which was
held in Swaziland in November 2011, emphasised that the implementation of the COMESA
Framework for Financial System Stability requires the creation of a COMESA database which
can be consulted by member countries in production of financial stability reports. The Governors
were convinced that such database will enable member countries who have not yet started
producing such reports to learn from the example of other member countries. This will also
enable interested stakeholders to gauge the degree of harmonisation and also act as a
compliance benchmark. The Governors therefore mandated the COMESA Monetary Institute to
organise a meeting on selected topics on financial system stability which can enhance the
capacity of member central banks to produce Financial Stability Reports.
2.
COMESA Monetary Institute, therefore, organised a 5 day meeting from 29 October
2012 to 2 November 2012 on the preparation of Forward Looking Financial Stability Reports by
member countries.
3.
The key objectives of the meeting were to:
a.
b.
c.
Provide hands on training to meeting participants on the preparation of forward
looking financial stability reports;
Discuss current issues on financial system stability; and
Share experiences in the preparation of forward looking financial stability reports.
4.
The report of the workshop was submitted to the Seventh Meeting of the Financial
System Development and Stability Sub-Committee which was held on November 3, 2012.
B.
ATTENDANCE, OPENING OF THE MEETING,ELECTION OF THE BUREAU,
ADOPTION OF THE AGENDA AND ORGANISATION OF WORK
5.
The meeting was attended by delegates from Burundi, Egypt, Eritrea, Kenya,
Madagascar, Malawi, Mauritius, Libya, Rwanda, Seychelles, Sudan, Uganda, Swaziland and
Zimbabwe. The list of participants is in Annex II.
Opening of the Meeting
6.
The Chairman welcomed the delegates and called the meeting to order.
Election of the Bureau
7.
The following central banks were elected as members of the Bureau for the SubCommittee
i.
ii.
National Bank of Rwanda, Chairman,
Reserve Bank of Malawi: Rapportuer.
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Adoption of the Agenda and Organisation of Work (Agenda item 2)
8.
The meeting adopted the following agenda:
a)
b)
c)
Opening of the meeting
Adoption of the Agenda and Organisation of Work
Presentations on the following:
i)
Country Reports on Implementation of the COMESA Assessment
Framework for Financial System Stability;
ii)
Overview of the Financial Stability Assessment Process: The role of Financial
Stability Departments, possible institutional arrangements and global trends
iii) Current Issues on Financial System Stability at the Global Level
iv) Overview of the COMESA Financial Stability Assessment Framework
v) The Financial Stability Assessment Process (FISTAS)
vi) Macroprudential Policy & Systemic Risk
vii) Systemic Risk & Systemically Important Financial Institutions
vii) Macrofinancial linkages, Transmission Channels & and their Implications on
Financial Stability
viii) Developments and Trends in Stress Testing
ix) Forward Looking Financial Stability Reports: Design, Developments and the
Way Forward
x)
Building a Framework for Assessing Systemic Risk
d)
e)
f)
g)
h)
9.
Group Exercises on the Preparation of Forward Looking Financial; Stability
Reports
Recommendations for 2013 Work Plan of the COMESA Financial Systems
Development and Stability Sub-Committee
Wrap Up Session
Any Other Business;
Adoption of the Report and Closure of the Meeting.
The meeting agreed on the following hours of work:
Morning
Afternoon
C.
09.00 hours
14.00 hours
-
12.30 hours
17.00 hours
ACCOUNT OF PROCEEDINGS
Country Reports on Implementation of the COMESA Assessment Framework for
Financial System Stability
10.
The meeting noted that member countries reported the status of their implementation of
the COMESA Assessment Framework of Financial Stability which is contained in Annex I of the
report. See table 1 for a summary of the status of implementation of the COMESA Assessment
Framework for Financial System Stability.
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11.
Regarding the member country reports, the meeting noted that most COMESA member
states have set up Financial Stability Units. The member states are at various stages of setting
up the Financial Stability Committees. Member countries are still working toward the conduct of
SHIELDS ratings of financial stability once the requsite institutional and logistical arrangements
have been finalised. It was further noted that financial stability assessments and
macroprudential supervision are new concepts, which have gained increased attention following
the global financial crisis. As such, there are still a number of challenges in respect of resources
and skills endowment.
12.
Following the sharing of country experiences, the meeting was informed that building a
robust financial stability assessment regimes require an ex-ante commitment of substantial time
and resources. There is also need for extensive training on financial stability assessments,
macro prudential assessments, macro stress testing, and preparation of forward looking
financial stability reports.
13.
Given the multi-faceted nature of financial stability assessments, the meeting
emphasized that reliance should be placed on a broad range of specialist skills. As such
supervisory authorities may need to rethink appropriate mix of skills and expertise and hire
specialists with competences in such fields as economics, finance, banking, econometrics,
statistics, law, and accounting.
14.
The meeting cautioned that care should be taken to avoid duplication of effort.
Cooperation with internal (within the institution) and external stakeholders is needed.
Establishment of good working contacts with other regulatory and supervisory agencies
facilitates easy exchange of information.
15.
The meeting also emphasized that reliance may be placed on simple methodologies
that are well understood as opposed to adoption of sophisticated models which may be ill-fitted
to the fundamental structural, organizational and institutional conditions on the ground.
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Table 1. Status of Implementation of the COMESA Financial Stability Assessment
Framework by Twelve Member Countries
No.
Task
Activity
1.
Financial Stability
Unit
Establish Financial
Stability Unit
2.
Financial Stability
Committee
Establish a multidisciplinary Financial
Stability Committee
3.
Strategic Plan
Develop in-country
Strategic
Implementation Plan
covering institutional
structures and chosen
methodologies and/or
modalities for:
 Information
gathering;
 Data analysis;
 Interpretation of the
results;
 Policy
recommendations;
and
 Policy
implementation.
Completion
Date
Status of
Implementation by
member countries
31
January Burundi, Egypt,
2012
Eritrea(WI), Kenya,
Mauritius, Rwanda,
Sudan, (WIP) Uganda,
Madagscar
(WIP)*,Malawi,
Seychelles (WIP),
Swaziland ,Zimbabwe
31 March 2012 Burundi (WIP),
Egypt), Eritrea (WIP),
Kenya, Mauritius,
Malawi Rwanda,
Sudan, Uganda,
Madagascar
(WIP),Swaziland
(WIP) Zimbabwe
31 March 2012 Burundi (WIP),
Egypt), Eritrea (WIP),
Kenya, Mauritius,
Malawi Rwanda
(WIP), Sudan (WIP),
Uganda, Madagscar
(WIP),
Seychelles(WIP),
Swaziland
(WIP),Zimbabwe
(WIP)
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4.
Action Plan
Develop in-country
31 March 2012
Action Plan for
Implementation of
COMESA Framework
covering:
 conduct of
consultative meetings
and/or meetings with
other stakeholders;
 establishment of
technical
subcommittee where
necessary;
 issuance of
customized guidance
on on-going
surveillance,
diagnostic
assessment, and
policy actions;
 production of
Financial Stability
Reports;
 Review of legislation
where necessary;
and
 Roll-out of the
Framework.
Burundi (WIP), Egypt
(WIP), Eritrea (WIP),
Kenya, Malawi (WIP),
Mauritius, Rwanda,
Sudan, Uganda,
Madagascar (WIP),
Seychelles(WIP),
Swaziland (WIP),
Zimbabwe (WIP)
5.
Financial Stability
Assessment
Implement Financial
Stability Assessment
Framework
incorporating:
 Financial Stability
Report (FSR) in
Prescribed Format;
 Financial Stability
Assessment Matrix;
 GLYOR five-tier
coding system;
 Financial
Soundness
Indicators (FSIs);
 Macro-prudential
analysis;
 Stress testing;
 Household Sector
Survey Results; and
 SHIELDS Rating
System
Burundi (WIP), Egypt
(WIP), Eritrea (WIP),
Kenya, Mauritius,
Malawi (WIP),
Rwanda (WIP), Sudan
(WIP), Uganda (WIP),
Madagascar (WIP),
Seychelles(WIP);
Swaziland (WIP),
Zimbabwe (WIP)
September
2011
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6.
Financial Stability
Assessment
Reports
Electronic submission
of Financial Stability
Assessment Reports to
the Secretariat for
posting onto the
COMESA website
October 2011
7.
Financial
Soundness
Indicators
Electronic submission
of Financial Soundness
Indicators (FSIs) to the
Secretariat for posting
onto the COMESA
website
60 days after
end of each
quarter with
effect from
December
2010
8.
Monitor compliance
with the 25 Basel
Core Principles for
Effective Banking
Supervision
Member countries
conduct selfevaluations
March 2011
Burundi (WIP), Egypt
(WIP) , Kenya,
Mauritius, Malawai
(WIP), Rwanda,
Sudan (WIP), Uganda,
Madagascar(WIP),
Seychelles (WIP),
Zimbabwe (WIP)
Burundi Egypt (,
Eretria (WIP), Kenya,
Mauritius,Malawi,
Rwanda, Sudan (),
Uganda, Madagascar
(WIP), Seychelles,
Zimbabwe
Burundi, Egypt, Eretria
(WIP), Kenya,
Mauritius, Malawi
Rwanda, Sudan,
Uganda,
Madagascar(WIP),
Seychelles(WIP)
Zimbabwe
*WIP – Work in Progress
Recommendation
16.
The meeting recommended that member central banks are urged to fully implement of
the COMESA Framework for Assessment of Financial System Stability.
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Overview of the Financial Stability Assessment Process: The role of Financial Stability
Departments, possible institutional arrangements and global trends
17.
Under this agenda item, the meeting was informed the different role of the Financial
Stability Departments. The meeting observed that t Central Banks should play a prominent role
in the financial stability remit, since they have expertise in monitoring macroeconomic and
financial market developments. This expertise could help shape policies aimed at containing the
build-up of systemic risks. In addition, their existing roles in monetary policy and payment
systems, makes central banks well placed to analyze systemic risks and the impact of individual
bank failure. This analytical expertise can help achieve greater clarity about the benefits and
costs of macroprudential policies. Furthermore, they also bring much-needed reputation and
independence. Finally, Central Banks have strong institutional incentives to ensure that
macroprudential policies are effective—because if they are not, central banks will have to take
costly corrective measures.
18.
The meeting noted that for Central Banks to undertake the macroprudential mandate
effectively, they must have the following characteristics. First, the objective of macroprudential
policy should be clearly spelt out. This will enhance accountability and reduce the risk of
political pressures. Second, the institutional arrangements must be country specific because
one size does not fit all. However, whatever institutional arrangement is chosen, Central Banks
should play a leading role. In addition, the tasks, powers and instruments must be clarified.
There must be transparency and accountability - prerequisites for good governance. Finally, the
body undertaking macroprudential policy should be independent to strengthen credibility.
19.
The meeting was informed that the Financial Stability Departments should Work closely
with other financial system regulators namely: financial intermediaries (including banks,
insurers, pension funds, etc); financial markets (as alternative sources of finance and as links
between institutions); financial system infrastructures (clearance, payment and settlement as
well as legal, regulatory, accounting and supervisory infrastructures) The meeting was also
informed that the activities of financial stability Departments must include among other things
the following:





Surveillance & monitoring to analyse vulnerabilities in the macro economy and financial
sector, conduct risk identification and design early warning systems.
Analysis & reporting through the Financial Stability Report (FSR) that is underpinned by
stress testing exercises that assess and quantify systemic risk, use of robust models,
risk calibration systems and financial system risk profiles. The units must compile and
maintain a robust data base of FSI’s
Macroprudential policy formulation and analysis is an important role for financial stability
departments. The Departments must provide timely assessment and policy advice. They
should enhance arrangements for managing a systemic financial crisis (crisis response
and management). In addition, they should coordinate policy on financial stability issues
between all the financial sector regulators.
Conduct research and analyse developments within regional and international markets.
They should prepare frameworks for financial stability analysis for their countries.
Conduct Financial Infrastructure Oversight. The departments should be responsible for
macro-prudential regulation of the payment systems. They should take the lead in
oversight the payments systems as a whole. To identify, manage and limit systemic
risks; undertake studies to identify the key risks that may escalate into a systemic crisis
in the payment system, payment instruments, infrastructure used to transfer large-value
payments between banks and other non bank financial institutions.
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







Communication via the Financial Stability Reports. The FSR’s should aim to: review the
health of the aggregate financial system, identify and analyse potential future threats to
systemic stability, communicate such assessments to the public and focus attention of
policy makers on financial stability issues in order to stimulate debate regarding pertinent
issues.
Focal point for participating in international efforts to address the issue of systemic
stability. The units should track international developments in techniques of analysis and
measurement as well as policy measures to curb vulnerabilities. They should evaluate
relevance, incorporate those appropriate to their circumstances, devote resources to
study new techniques of analyzing vulnerability and be involved in cross border crisis
mitigation.
For Financial Stability Departments to adequately execute their role, the following are
the prerequisites:
The need for a clear understanding of what constitutes macroprudential policy. It is
important to lay out a clear understanding of what macroprudential policy is, and what it
is not; and what it can and cannot do. It must be clear that macroprudential policy seeks
to limit systemic financial risks by using primarily prudential tools. These prudential tools
are designed to prevent financial instability and the associated social and economic
costs.
Financial stability is a shared responsibility. No matter how different policy mandates are
structured, ensuring financial stability is a shared responsibility. Mechanisms must be
established for coordination across policies.
In the design of macroprudential policy frameworks, one size does not fit all. However, it
must be ensured that all the other regulatory and supervisory agencies are involved in
an adequate manner.
Macroprudential policy is necessary—but it is not a magic bullet. Macroprudential policy
is in its infancy. Many issues remain unresolved, for example, we are yet to obtain an
appropriate understanding as well as measurement of systemic risk.
Countries should ensure that all systemic risks are addressed and all potential policy
conflicts managed through cooperation among national authorities.
Recommendations
20.
The meeting recommended the following:
i.
ii.
iii.
Central bank are urged to develop sound macroprudential policy framework.
Central banks are urged to build human skills on a sustainabe basis and
infrastructural requirements for the conduct of macroprudential policy analysis.
Central banks should ensure that international cooperation is increased to ensure
the consistent application of macroprudential policies at national levels
Current Issues on Financial System Stability at the Global Level
21.
The meeting observed the following salient points under this presentation:
The sources of risk to financial stability include sovereign debt, distress from systemically
important banks, spill overs and contagion from external financial shocks and cyclicality of credit
growth. In addition, common exposures to real estate property markets and the global demand
for safe assets were noted as emerging risks. The financial impact of longevity risk, cross
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border financial activity, the redesign of recovery and resolution plans were some of the areas
being considered for regulatory reform at the global level.
22.
The surveillance by the IMF helps to highlight global systemic vulnerabilities. In addition,
it examines possible spill overs that may occur across markets (e.g. US Subprime mortgages to
global interbank market) or across countries (e.g. Emerging Market financing, European
sovereign crisis spill overs). In addition, it assists to provide policy advice on financial sector
reform and in assuring level playing fields.
23.
The October 2012 assessment indicates that the key risks to global financial system
stability had increased since the April 2012 GFSR, as confidence in the global financial system
had become very fragile. However, significant new efforts by European policymakers have
relieved investors’ biggest fears, but the euro area crisis remains the principal source of
concern.
24.
The unfolding euro area crisis has generated safe-haven flows to countries like the
United States and Japan. These flows have pushed government funding costs to historical lows,
but both countries continue to face significant fiscal challenges. The crisis has spurred a host of
regulatory reforms which are likely to produce a safer banking system over time. The success of
the regulatory reforms depends on effective implementation and strong supervision. Without
those elements, regulatory reforms may fail to secure greater financial stability.
25.
Whatever, financial regulatory measures are adopted to enhance growth and stability,
they are likely to be effective only if they are implemented correctly. The quality of domestic and
global regulation and supervision is essential.
Recommendations
26.
The meeting recommended the following:
i)
ii)
iii)
iv)
Central banks are urged to set up supervisory colleges or other means to discuss
the cross border business activities of financial institutions and other banking
supervision and regulation issues.
Regulators should design and implement measures to curb excessive credit growth
during the upswing of the economic cycle.
Regulators need to design and implement measures for monitoring foreign
liabilities of banks and capital flows.
Central banks should strengthen the supervision of systemically important banks.
and, where these banks are subsidiaries of international or regional banks, build
more effective links with their home country supervisors.
Overview of the COMESA Financial Stability Assessment Framework
27.
The meeting observed that financial stability assessments and macroprudential
supervision are new concepts, which have gained increased attention following the Global
Financial Crisis. As such, there are still a number of challenges in respect of resources and sills
endowment.
28.
The meeting agreed that Financial Stability is often characterised as a multifaceted
phenomenon prone to various internal and external shocks. Accordingly, the COMESA
Framework for Financial Stability Assessment provides for systematic monitoring of the
individual parts of the financial system (institutions, markets, and infrastructure); components of
the real economy (households, firms, & public sector); global macro-financial developments;
and event risk (e.g. catastrophes).
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29.
The meeting also agreed that the SHIELDS rating system has inbuilt flexibility which
allows financial stability assessment practitioners to employ the most appropriate tools and
instruments in accordance with developments in the real and financial sectors.
30.
Regarding the choice of an appropriate regulatory structure to facilitate effective financial
stability assessment it was noted that there is no one best solution as regulatory architecture
varies across jurisdictions.
31.
The meeting was informed that in some jurisdictions the Financial Stability Unit (FSU) is
a subset of the Banking Supervision Department while in some the FSU is housed in Economic
Research. One approach is to set up a stand alone FSU.
32.
The meeting was informed that key conceptual issues to consider are accesses to data,
propensity to act and independence. Financial stability units are usually established within
central banks to draw on accumulated prudential and/or financial system data as well as
economic research competences. Propensity to act considers responsiveness, incentives and
competences to act on financial stability developments.
The Financial Stability Assessment Process (FiSTAs)
33.
The meeting observed that financial stability is regarded as an important economic
policy objective in most countries. In practice financial stability assessment frameworks in some
central banks are largely under-developed with no clear institutional objective and/or legal
backing. Some countries have no standardised frameworks to inform the gathering, processing,
analysis and/or interpretation of financial and macroeconomic indicators for financial stability
purposes. As such, many countries still produce financial stability reports lacking in overall
financial stability assessment, forward looking outlook and granularity.
34.
The meeting agreed that the utilisation of a coherent Framework for Financial Stability
Assessment will facilitate comparison of financial stability assessments over time within a given
country and across nations.
35.
The meeting also agreed that the COMESA Financial Stability Assessment Framework
provides a structured, comprehensive, and conceptually sound analytical framework for the
assessment and measurement of systemic stability over time and across nations, via the
SHIELDS rating system.
36.
The meeting was informed that the Financial Stability Assessment System (FiSTAs)
provides a standardised but flexible format by which macroprudential authorities may identify,
analyse, measure, mitigate, monitor and report financial stability issues, risks and
vulnerabilities.The SHIELDS rating system also provides structure and discipline to the process
of continuous information gathering, analysis, and monitoring; as well as formulation of risk
mitigation strategies. By construction the SHIELDS rating system can accommodate any
theoretical and empirical advances, judgemental and professional insights as part of the overall
assessment of financial stability.
37.
The meeting also agreed that the SHIELDS rating system is implementable in all
countries notwithstanding their level of regulatory sophistication. The framework relies, for its
inputs, on concepts and international standards that are well established in the microprudential
supervision fraternity. Most bank examiners are familiar with Financial Soundness Indicators as
well as stress testing. The multi-component construction of SHIELDS, for instance, is familiar to
most bank examiners using CAMELS rating system. The SHIELDS rating system, like
CAMELS, is based on a comprehensive quantitative and qualitative evaluation criteria. It was
further noted that the rating of Sovereign risk, also makes use of a number of cross sectoral
factors.
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38.
The meeting agreed that implementation of the COMESA Framework for Financial
Stability Assessment by member countries will facilitate comparison of financial stability
assessments over time within a given country and across nations.
39.
The meeting also agreed that adherence to the framework by COMESA member
countries will provide minimum benchmarks as well as ensure uniformity in the assessment of
financial stability in the region, which is an essential building block towards the attainment of
regional harmonisation.
40.
The meeting further agreed that timely production of COMESA-wide Financial Stability
Reports will complement reviews produced by central banks of the member countries.
41.
The meeting was informed that there were calls for regional benchmarks to facilitate
implementation of the SHIELDS rating system. The consultants advised that regional
benchmarks may not be desirable where there is no full monetary and fiscal union. The best
way to go may be the development of an implementation manual given the country specific
circumstances of member countries.
42.
The meeting agreed that there is still room for great improvement toward implementation
of the COMESA Framework for Financial System Stability, by way of aggressive in-country
meetings and practical missions focusing on macroprudential analysis, overall assessment of
financial stability and production of forward looking financial stability reports.
Recommendation
43.
CMI should develop an implementation manual to facilitate effective roll out of the
SHIELDS rating system. The financial System Development and Stability Sub-Committee
should validate the Manual before its implementation.
Macroprudential Policy & Systemic Risk
44.
item:
The meeting noted the following salient points of the presentation under this agenda
45.
The Global Financial Crisis (GFC) rekindled interest in macro-prudential analysis to
supplement micro-prudential analysis. It noted that the concept of macroprudential analysis is
not new, and has been traced to unpublished documents in the 1970s. The GFC, however,
reconfirmed that financial systems have inherent tendencies towards booms and busts, whose
depth and severity are amplified by the highly interconnected nature of financial institutions and
markets, as well as feedback effects between the macro economy and the financial system.
Cognisant of these challenges, on November 12, 2010, the G-20 leaders asked the Financial
Stability Board (FSB), International Monetary Fund (IMF), and the Bank of International
Settlements (BIS) to develop and fine-tune macroprudential policy frameworks.
46.
Macroprudential analysis is a key building block of any policy framework for vulnerability
analysis. Macroprudential analysis focuses on the health and stability of financial systems,
whereas microprudential analysis deals with the safety and soundness of individual financial
institutions.
47.
Macroprudential analysis is a methodological tool that helps with the identification,
quantification and qualification of the soundness and vulnerabilities of the overall financial
systems. It uses aggregated prudential data to obtain direct information on the current health of
financial institutions; macroeconomic data to help set the analysis in the context of broader
economic and financial trends; stress tests and scenario analysis to determine the sensitivity of
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the financial system to macroeconomic shocks; market based information –such as prices and
yields of financial instruments and credit ratings as complementary variables conveying market
perceptions of the health of financial institutions; and qualitative information on institutional and
regulatory frameworks to help interpret developments in prudential variables. Structural data
including aggregates of the size of the main segments of the financial system, ownership
structures, and concentrations, typically supplement the analysis.
48.
The quantitative macroprudential analysis typically involves monitoring, at a suitable
level of aggregation, a range of FSIs of banks, of key non-bank financial sectors and relevant
non-financial sectors, analyzing their economic and institutional determinants, and examining
the impact of various plausible, but exceptional macroeconomic and institutional shocks on the
FSIs. Such monitoring and analysis of FSIs, referred to as macroprudential surveillance,
includes the stress testing of the system and helps identify the key sources of risks and
vulnerabilities.
49.
The macroprudential surveillance also encompasses a surveillance of financial markets
that helps assess likelihood of economic shocks, and an analysis of macrofinancial linkages that
focuses on the extent to which shifts in financial soundness may itself affect macroeconomic
and real sector developments. This combination of approaches captures the two way linkages
between macro economy and financial soundness in formulating an overall stability
assessment.
50.
The analysis should consider the linkages of domestic financial markets to global
markets, and the extent to which government policies (taxes, subsidies, monetary and
exchange regimes etc) affect market discipline and risk taking.
51.
Quantitative analysis should be complemented by qualitative assessments of the
effectiveness of financial sector supervision and robustness of financial infrastructure.
Qualitative assessments help identify the key institutional and policy issues mitigatory to the
identified risks and vulnerabilities and help inform overall stability assessment and policy actions
52.
A policy that uses primarily prudential tools to limit systemic or system-wide financial
risk, thereby limiting the incidence of disruptions in the provision of key financial services that
can have serious consequences for the real economy, by: (a) dampening the build-up of
financial imbalances and building defences that contain the speed and sharpness of subsequent
downswings and their effects on the economy; and (b) identifying and addressing common
exposures, risk concentrations, linkages and interdependencies that are sources of contagion
and spillover risks that may jeopardise the functioning of the system as a whole.
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53.
Macroprudential policy has two dimensions (a) time dimension that focuses on procyclicality in the financial system; and (b) cross-sectoral dimension addressing “fault lines”
arising from risk concentrations and balance sheet linkages. The goal of on-going surveillance is
become aware of developing risks before they result in a crisis. This calls for use of many
prudential tools on an on-going basis and as needed to reduce systemic risk and increase
resilience. Continuous preventive monitoring requires ability to analyze several types of data at
the firm, market, national, and international level on a regular basis. Given complementary
nature of macroprudential and other areas of economic policy, agencies in charge of its
implementation should inform and be informed by monetary, fiscal, and other government
policies.
Systemic Risk & Systemically Important Financial Institutions
54.
item:
The meeting was informed the following highlights of the presentation under this agenda
55.
A representative definition of systemic risk following the work of the IMF, FSB and BIS
is “a risk of disruption of financial services that is caused by an impairment of all or parts of the
financial system and has the potential to have serious negative consequences for the real
economy.”
56.
Systemic risk takes a system-wide perspective rather than the soundness of individual
markets/institutions. Systemic risk is endogenous as collective behaviour of financial institutions
can result in crystallisation of vulnerabilities and severe disruptions to the financial system,
which could be self-feeding, pro-cyclical and mutating.
57.
Macroprudential policy does not seek to eliminate risk and volatility entirely. Risk and
volatility are essential elements of a properly functioning financial system. Macroprudential
policy seeks to enhance the resilience of the financial system and to prevent risk and volatility
from threatening financial stability. A strong Macroprudential Policy does not, therefore, prevent
financial crises but minimises their impact. It follows that macroprudential policy, like
macroeconomic policy, is both prospective and preventive, and not merely a set of tools to be
used upon the near failure of systemically important financial institutions.
58.
According to the FSB, systemically important financial institutions may be identified on
the basis of three key criteria:
i.
size (the volume of financial services provided by the individual component of the
financial system);
ii.
substitutability (the extent to which other components of the system can provide
the same services in the events of a failure); and
iii.
Interconnectedness (linkages with other components of the system).
59.
Systemic importance is often time-dependent, and can change in a crisis. There is need
to gather underlying information to assess potential systemic impact at any given time.
Application of macrprudential policy must begin before risks have propagated through the
system.
60.
Macroprudential supervisors must identify, analyse, publish anticipatory guidance on,
and address systemic risks as they emerge .A fundamental concern of macroprudential policy is
the way interlinkages of financial institutions and markets and their common exposure to
CS/CMI/FSDSS/7/5
Page 14
economic variables create risks, whose propagation may increase riskiness and fragility of the
whole financial system.
61.
Systemic risk has two dimensions, namely a cross-sectional dimension, and a time
dimension.
62.
Cross sectional dimension pertains to how risk is allocated within the financial system at
a point in time. The sources are common exposure and interlinkages leading to domino effect
(contagion) or to joint failure. Some of the indicators include mmeasures of interdependence,
interlinkages and exposure to common risk factors. The assessment criteria may involve an
analysis of funding structures, asset structures, large exposures, hedging activity, financial
infrastructure.
63.
The degree of interconnectedness and common exposures renders the financial system
vulnerable to a rapid propagation of failures. For instance, the failure of Bear Stearns, Lehman
Brothers, and AIG, and liquidity challenges of major banks during the GFC thrust the
interconnectedness of financial institutions into the public consciousness.
64.
Large financial institutions have definitive benefits stemming from economies of scale.
Well-managed, large firms can be less risky and often play a key role in resolution actions. It
was noted that ideally, as a matter of policy, no institution should be “too big to fail.” In practice
small institutions can be ‘systemic as a group’ as otherwise unimportant institutions can become
systemic if their problems are seen as representative of broader problems shared by other
institutions.
65.
Time dimension deals with how aggregate risk in the financial system evolves over time.
Source is the pro-cyclicality of financial system. Systemic risk can also arise from herd
behaviour by financial institutions, nonfinancial firms, individuals & other activities that cause
procyclical movement. Time dimension thus involves the assessment of trends and
developments over time. In this perspective, the primary source of risk is procyclicality, while the
indicators may include credit and asset price trends, changes in risk premia, liquidity trends, and
general underpicing of risk. The assessment criteria may espouse time series analyses,
correlations, standard deviation, causality tests, volatility indicators, ‘excessive’ or exceptional
trends relative to benchmarks and historical norms.
66.
In summary systemic risk builds up through contagion (inter-connectedness) and
common exposures; procyclical nature of financial system and prudential regulations; as well as
regulatory arbitrage due to limited perimeter of regulation, and financial innovation involving
opaque and poorly understood products.
67.
Various macroprudential tools which may be deployed to manage systemic risk were
discussed.
68.
A single macroprudential regulator may be given control over macroprudential tools,
along with a well formulated mandate, sufficient authority and resources, professional
independence with accountability.A large body of literature favours the Central Bank to be
designated as the macroprudential regulator in view of the perceived expertise, reputational
authority, deep knowledge of financial markets (and institutions where it is microprudential
regulator), handling of monetary policy and experience in handling financial stability issues
Macrofinancial linkages, Transmission Channels & and their Implications on Financial
Stability
69.
item:
The meeting noted the following salient points of the presentation under this agenda
CS/CMI/FSDSS/7/5
Page 15
70.
There is rich and divergent intellectual history of interactions among money, credit,
asset prices, inflation, expectations, and business cycles. Some of the perspectives are
discussed hereunder for illustrative purposes. Classical economics emphasises the neutrality of
the financial system while others, for instance, Schumpeter’s (1936) acknowledged the real
effects of finance.
71.
Irving Fisher’s Debt-deflation (1933) theories put emphasise on interactions between
credit crunches, falls in asset prices, profits, and the general price level in generating a
dynamics of deflation and crises.
72.
In Arrow-Debreu models there is no specific role for the financial system. Following the
Modigliani-Miller theorem (1958) banks and other financial institutions were considered
irrelevant. The formalization of Keynes’ theory and the monetarist theory reserved no special
role for banks other than money creation. The Efficient Markets Hypothesis (EMH), associated
with work of Eugene Fama (1970), Samuelson (1965), Robert Merton (1974), etc wherein asset
prices are expected to follow a random walk, does not acknowledge the ‘specialness’ of banking
institutions.
73.
The development of information asymmetry theories provided roles for banks and other
financial intermediaries to mitigate these information problems. Hyman Minsky’s (1963, 1975,
1986) Financial Instability Hypothesis considered financial institutions to be inherently unstable.
Keynes’ (1936) “animal spirits” in private investments also leads to cycles “casino economics.
74.
Kindleberger’s book Manias, Panics, and Crashes applied Minsky’s and Fisher’s ideas to
the role of credit and debt in fuelling booms, via acquisition of speculative assets, and
indebtedness makes recovery from crashes and recessions complex and protracted. Literature
on Imperfect Markets by George Akerloff, Joseph Stiglitz, Ben Bernanke etc draw several
inefficiency results showing sub-optimal equilibrium in financial markets.
75.
Credit and financial markets transmit and amplifying the effects of real or monetary
shocks on real economic activity, through the so-called credit channel and financial accelerator
(Bernanke, 2007) which may be detrimental to financial stability.
76.
Analysis of macro-financial linkages focuses on the transmission of shocks through the
financial system to the macroeconomy and vice versa, which arises from the many ways in
which different non-financial sectors rely on intermediation by the financial sector in order to
conduct their activities.
77.
For most developing countries the focus is on the banking sector in terms of its relative
size in the financial sector, potential for vulnerability, and provision of credit to small to medium
enterprises (SMEs).
78.
Although the macro-financial linkages differ significantly across countries, the main
linkages are likely to derive from:
i.
The dependence of non-financial sector (e.g. corporate, households, and
public sectors) on financing provided by domestic and foreign banks;
ii.
Deposits and wealth of these sectors placed with the financial sector (that is,
domestically owned and foreign controlled financial institutions), which would
be at risk in crisis at home or abroad;
iii.
The role and impact of the banking sector (problems) on the monetary
transmission mechanism; and
CS/CMI/FSDSS/7/5
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iv.
The financial sector’s holdings of securities issued by, and loans to, the
government, such that problems in the financial sector could adversely affect
debt sustainability.
79.
Analysis of macro-financial linkages is essential as monetary stability and financial
stability are connected. A significant disruption in the financial system would affect the
implementation and effectiveness of monetary policy, while macroeconomic stability helps
reduce risks to financial stability. Thus the fragility of the financial system also depends on
macroeconomic conditions.
80.
Hence, from a financial stability point of view, the analysis of macro-financial linkages is
essential, as it is important to understand the developments in macroeconomic conditions such
as disposable income of households and firm, profits, or unemployment and bankruptcy rates,
and how these developments affect financial stability.
81.
Developments in financial system soundness can have a significant impact on debt
sustainability of households, corporations, and governments and debt sustainability problems in
different sectors are mutually reinforcing. Debt sustainability problems in the non-financial
sectors can further weaken the financial system by affecting the value of loans and securities
held by the financial sector. Strong growth in debt burdens, imbalances in asset prices, and
national or international macroeconomic disturbances that cause debt servicing abilities or
collateral values to decrease, may negatively affect financial stability.
82.
Financial dollarization also increases the vulnerability of financial systems to solvency
and liquidity risks. Unless liquid dollar liabilities are backed by sufficient liquid dollar assets
abroad, banks may run out of dollar liquid reserves and fail to pay off dollar liabilities. Similarly
central banks may run out of international reserves to provide dollar lender of last resort support
to distressed banks. In highly dollarized countries, it is therefore, necessary that financial
stability assessment should thus indicate the extent to which dollarisation is a potential source
of vulnerability and suggests appropriate risk mitigation measures.
83.
Relevance of these mechanisms will vary over time and across countries, subject to the
degree of institutional development, depth, breadth, and liquidity of financial markets, modalities
for conducting monetary policy, degree of financial integration with the rest of the world, and
other factors.
Macroeconometric Modelling and Macrofinancial Linkages
84.
item:
The meeting observed the following highlights of the presentation under this agenda
85.
In practice financial stability is a complex phenomenon dependable on iterative
interactions of many risks and feedback effects from financial stability to the real economy. Most
academics and practitioners concur there will never be one best model for all purposes, hence
the need for a suite of models.
86.
Bårdsen, Lindquist and Tsomocos (2006, 15), following Pagan (2003) propose that there
is a spectrum of modelling approaches ranging from theory coherency models to data
coherency models with little explicit theoretical content as illustrated in the chart below:
CS/CMI/FSDSS/7/5
Page 17
87.
Under hybrid models the equilibrium relationship among variables is determined by
some theoretical specification, while the dynamic adjustment mechanisms are determined by
the data.
88.
The meeting considered the role and applicability of various approaches to
macroeconomic modelling:
a. Large scale macroeconomic models
b. Unrestricted, Bayesian and structural VARs
c. Dynamic stochastic general equilibrium
d. Structural cointegration VAR approach
89.
The meeting was informed that models used for financial stability purposes should take
into account the following characteristics:
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Desirable Characteristics for Financial Stability Models
No.
Characteristic
1. Contagion
Description
Possibility of interactive contagion due to direct interbank
linkages or indirect interactions with other market
participants via credit and loans markets.
2.
Default
Possibility of default as an equilibrium outcome
stemming form economic agents’ optimal behaviour to
uncertainty. Implies discontinuous non-linear properties
which are difficult to model.
3.
Missing Financial
Markets
In real life markets are incomplete or otherwise
imperfect. Missing markets justify regulatory policy
intervention and analysis of consequences thereof.
With incomplete markets, the economy may fail to
reach constrained Pareto-optimality while policy
intervention may induce welfare improvements.
4.
Roles for Money,
Banks, Liquidity and
Default Risk
Modelling systemic risk should incorporate liquidity and
incomplete financial markets. As long as money has a
distinct role in the economy (not substitutable) liquidity
affects both real and nominal sectors.
5.
Heterogeneous
Agents
Agent heterogeneity is an important property for
modelling contagion, as well as crisis prevention and
management. It provides incentives for inter-bank
trading. Assumptions for a representative banks and
identical customers are not realistic.
6.
Macroeconomic
Conditions
Financial stability models should incorporate
exogenous risk factors and the impact of macrofinancial linkages on stability. Macroeconomic
conditions affect the number of bankruptcies, level of
unemployment, and the benevolence of banks which
may amplify macroeconomic shocks.
7.
Structural Microfoundations
There is a wide range of models for financial stability
analysis stretching from data congruence to theoretical
coherence models.
8.
Empirically Tractable
Theoretical models will not have practical relevance
unless they are empirically tractable, i.e. usable to
assess financial stability using real data.
9.
Forecasting and
Policy Analysis
Forecasting models should be robust, i.e. invariant to
shocks (external events and policy changes). In view of
the Lucas Critique (1976) &Goodhart’s Law (1975)
models applied for policy analysis should clarify the
transmission mechanism involved.
10.
Testing Device
Potential to test alternative theories of relevance. Act as
a reliance reality check in many situations.
CS/CMI/FSDSS/7/5
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90.
The meeting noted other econometric techniques which have been utilized in some other
jurisdictions, which include:
e. Cointegration and Long Run Structural Modelling
f.
Banking Stability Measures including the Consistent Information Multivariate Density
Optimizing (CIMDO) approach;
g. Merton Failure Prediction Model;
h. Distance to Default and Distance-to-Capital;
i.
CISS – Composite Indicator of Systemic Stress developed by researchers at the
ECB;
j.
GIFT – Global Index of Financial Turbulance developed at the ECB in 2009
k. MOSES - Model of swedish economic studies; and
l.
Macro Stress Testing Framework
91.
A key consideration in the development of macro financial models is the need for
policymakers to understand the macroeconomic effects of macroprudential policy tools,
skills,operational applicability thereof, and implications for financial stability.
Recommendations
92.
The meeting recommended the following:
i)
ii)
The CMI should conduct hands on training on econometric modelling for financial
stability, that is applicable to COMESA Member countries including macro stress
testing with hypothetical data;
CMI should explore the possibility of obtaining actual data to be used for
macroeconomic stress test exercises from member countries who are willing to
avail such data; and
Developments and Trends in Stress Testing
93.
The meeting was informed on the following salient points of of developments in Micro
and Macro stress testing with
emphasis on recent developments that have a bearing on
macroprudential policy formulation and analysis:
94.
Micro stress testing supplements other risk management tools. It provides forward
looking assessments of risks, facilitates development of mitigation plans. Macro stress testing
on the other hand is designed to stress the financial system as a whole or sub-sets thereof,
rather than micro stress testing that is designed to stress individual institutions.
95.
Given the current technology macro stress tests are still ill-suited as early warning
devices (tools for identifying vulnerabilities during tranquil times and for triggering remedial
action).
96.
In spite of these short comings macro stress tests are quite effective as tools for crisis
management and resolution. Macro stress tests can discipline our thinking about financial
stability risks, they help to reconcile different perspectives of different stakeholders, foster better
communication, help cross check performance of individual firms’ risk models and identify
important data gaps.
97.
Macro stress tests will increasingly become the core element of macroprudential
frameworks. It is important to understand what stress tests can and cannot do. Expectations
should not be set unrealistically high. Stress tests as currently set up have limited reliability for
CS/CMI/FSDSS/7/5
Page 20
identifying vulnerabilities in tranquil times. They can help to improve the dialogue about financial
stability vulnerabilities, but must be properly interpreted. Macro stress testing in COMESA.
countries still has a long way to go given the data and methodological gaps that exist. There are
several directions for improvement.
Recommendation
98. The meeting recommended the following:

Central Banks should develop capacity to conduct macroprudential analysis and
macro stress testing on a regular basis. This may require expanding the scope of
data collection to include real estate prices, and balance sheets of corporate and
household sectors.
Forward Looking Financial Stability Reports: Design, Developments and the Way
Forward
98.
. The meeting was informed that a a number of developments that had occurred world
wide with regard to financial stability reports in terms of clarity, coverage of key risks and
consistency overtime were examined. It was also noted that
a number of reports in the
COMESA region lack the “forward-lookingness” aspect and provided mechanisms through
which the reports could be made to provide sufficient analysis of the risks and vulnerabilities in
our financial sectors so that they become important vehicles for systemic risk assessment. The
following were highlighted as the most important elements of the report;









The reports should include forward looking statements about risks and vulnerabilities, its
tools should include stress testing and other forward looking techniques.
The report should clarify the objective for its publication. At the very least the objective
should be identifying and analysing risks to the financial system.
A forward looking FSR has an Improved coverage of key systemic risks. The reports
should consistently cover the key systemic risk factors, the discussions should be based
on the projected trends of financial indicators and results of sensitivity or scenario stress
testing, the coverage of risks should be comprehensive to include detailed analysis of
risks specific to the domestic financial system.
The FSR should employ more forward looking analysis through the provision of forward
looking views, assessments or projections consistently and comprehensively.
The quantitative content of the reports should be improved. FSRs should report forward
looking stress testing results on a regular basis, if possible provide granularity on
systemic institutions. The underlying assumptions should be provided, a description of
the methodology for the stress tests should be provided.
More discussion of macroprudential policies is required. FSRs should focus on
macroprudential measures, with a discussion of policy measures closely tied to the risks
and vulnerabilities. Policy actions should arise from a risk assessment of the financial
system for the outcomes to impact the behaviour of agents.
The reports should raise any concerns regarding data gaps. This is in regard to data
availability or, completeness in analysis.
The region should move towards standardization of FSR Publication. This is in respect
to: dates of release, period of coverage and, regularity of the reports.
At the minimum a Forward Looking FSR should have the following suggested outline:
CS/CMI/FSDSS/7/5
Page 21
–
Chapter 1 – Overview and Executive Summary, a two-to-three page summary
focused on briefly identifying the main threats to systemic stability and measures
to prevent them or mitigate the consequences;
–
Chapter 2 – Economic and financial conditions, vulnerabilities to the outlook;
–
Chapter 3 - Main Risk scenarios (e.g stability implications of external demand
shocks or liquidity problems on the banking system): Future Prospects, Risks
and Stress Tests );
–
Chapter 4 - Conclusions and policy recommendations for preventing systemic
problems or dealing with them if prevention fails. May also review developments
in macroprudential policy since the last report.
–
Appendix I – Special Topics (optional).
–
Appendix II- Statistical Tables, FSIs and Consolidated balance sheet of the
banking sector.
Recommendation
99.
Central banks are required to continue with capacity building and knowledge sharing
initiatives to facilitate the production of forward looking financial stability reports
Building a Framework for Assessing Systemic Risk
100. The meeting noted the following highlights of the presentation under this agenda item:
There have been a number of developments in the assessment of systemic risk. In this
presentation the following simple framework that is relevant for COMESA countries in
conducting three important aspects of risk assessment was discussed. First, identification of
the critical parts of the financial system that are most likely to generate concerns about systemic
stability. Second, determination the main interconnections within the financial system and
between the financial system and the real economy. Finally, identification of the data that will
be needed in times of crisis.
101. Before a crisis actually hits, preparatory work revolves around the following activities:
Defining critical elements of the financial system, mapping interconnections, identifying
information needs and, defining scaling criteria. Performing systemic risk assessment in the
context of an actual crisis requires a thorough understanding of the critical parts of their financial
system and the main contagion channels. More specifically the following are required to build a
framework for assessing systemic risk:

The successful implementation of the systemic risk assessment framework in the
context of an actual crisis within COMESA countries requires cooperation of the
authorities involved in supervision and financial stability (Central Banks, Ministries of
Finance, Deposit Insurance, Insurance and Capital markets regulators).

COMESA countries should assign the responsibility for conducting the assessment
to specific staff, such as Financial Stability Departments.

Member states should identify information needs in times of crises. Procedures need
to be put in place to ensure that the information that is most likely to be needed is
either readily available in so-called fact books or can be made available at short
CS/CMI/FSDSS/7/5
Page 22
notice. Those responsible for conducting the assessment also should have adequate
access to Information.

Financial crises are by nature multidisciplinary phenomena and transcend the
boundaries of individual Departments. Different disciplines will need to work together
in crisis situations.

Strong support at the executive level is required. Possible ways to achieve these
objectives include: applying the framework to previous crises (“back testing”) or
tailoring a crisis simulation exercise (either domestically or internationally) around the
conduct of a systemic risk assessment.

Countries that have a high share of foreign ownership in their financial sectors or
have financial sectors with significant overseas operations may want to reach out to
foreign supervisors.

Cross-border crisis management arrangements may also be periodically tested in
crisis simulation exercises. In addition to establishing formal MOUs, engaging in
regular informal contact with the home supervisor helps create a basis of trust
needed for a proactive exchange of information.

The framework requires regular maintenance. Authorities need to be willing to invest
in keeping the short list of critical parts of the financial system. The contagion matrix
framework up-to-date should be done by reviewing it at least once a year. The
framework has considerable implications for staffing and resources for COMESA
countries that would like to implement it. This requires a strong commitment on
behalf of the implementing country.
Recommendation
102. Central Banks should build human skills on a sustainable basis for gauging and
determining granular overall ratings of systemic risk or financial stability in accordance with the
COMESA framework for financial stability assessment.
Group Exercises on Preparation of Forward looking Financial stability reports
103. The meeting noted the following activities that were undertaken under this agenda item:
To provide hands on training on the preparation of Forward Looking Financial Stability Reports
a case study based on an imaginary country called AZALAND was employed.
104. To undertake this exercise the delegates were divided into three groups and addressed
the following questions:
a)
What are the main threats to financial stability in Azaland?
CS/CMI/FSDSS/7/5
Page 23
b)
Which macroprudential (economic and financial) indicators should the
central bank of Azaland consider for its financial stability assessment?
c)
How to assess the overall design of the stress testing framework of the
central bank of Azaland?
d)
Is the stress test framework of the Central Bank of Azaland comprehensive
enough to capture the major risks of the banking sector
e)
How to assess the stress test results under the baseline and adverse
scenario for the banking system in Azaland?
105. After addressing the above questions, the groups proposed outline of a Forward Looking
Financial Stability Reports for the Central Bank of Azaland. They indicated the risks that they
emphasise in the stress tests,; what might be the transmission channels; and what they would
propose to deal with these risks.
106.
In the discussion after the presentation by the groups, delegates proposed the following:





Requested for more practical case studies in future meetings;
Use of dedicated resource persons for each group;
The provision of model solutions to the practical group work;
The use of simple tools; and
The setting aside of more time to practical work.
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Page 24
Meeting recommendations for the 2013 Work Plan of the COMESA Financial System
Development and Stability Sub-Committee
107. The meeting recommended the following work programme for the Sub-Committee for
the year 2013 :
No.
Task
1
2
3
4.
Activity
Responsibilit
y
Completion
Date
Financial
Establish Financial Stability
Stability Unit Unit
Member
Countries
Sept. 2013
Financial
Stability
Committee
Establish a multi-disciplinary
Financial Stability Committee
Member
Countries
Sept 2013
Strategic
Plan
Develop in-country Strategic
Implementation Plan
covering institutional
structures and chosen
methodologies and/or
modalities for:
 Information gathering;
 Data analysis;
 Interpretation of the
results;
 Policy recommendations;
and
 Policy implementation.
Member
Countries
June 2013
Macroprude
ntial policies
Develop sound
macroprudential policies
Member
countries
Sept 2013
CS/CMI/FSDSS/7/5
Page 25
5.
Action Plan
Develop in-country Action
Plan for Implementation of
COMESA Framework
covering:
 conduct of consultative
meetings and/or meetings
with other stakeholders;
 establishment of technical
subcommittee where
necessary;
 issuance of customized
guidance on on-going
surveillance, diagnostic
assessment, and policy
actions;
 production of Financial
Stability Reports;
 Review of legislation
where necessary; and
 Roll-out of the
Framework.
Member
Countries
Financial
Stability
Assessment
Implement Financial Stability
Assessment Framework
incorporating:
 Forward looking financial
Stability Report (FSR)
 Financial Stability
Assessment Matrix;
 GLYOR five-tier coding
system;
 Financial Soundness
Indicators (FSIs);
 Macro-prudential
analysis;
 Stress testing; and
 SHIELDS Rating System
Member
Countries
Dec. 2013
7
Forward
Looking
Financial
Stability
Reports
Electronic submission of
Financial Stability
Assessment Reports to the
Secretariat for posting onto
the COMESA website
CMI/
Member
Countries
October
2013
8
Financial
Soundness
Indicators
Electronic submission of IMF
Financial Soundness
Indicators (FSIs) for banking
sector to the Secretariat for
posting onto the COMESA
website
CMI/
Member
Countries
60 days
after end of
each
quarter with
effect from
December
2012
6
Sept 2013
CS/CMI/FSDSS/7/5
Page 26
9
10
Operational
Manual for
the
COMESA
Assessment
Framework
on Financial
Stability
Capacity
Building
Preparation of the Manual
CMI
June 2013
Conduct hands on training
on the following:
i) macrostress testing
approaches with hypothetical
data;
ii)Econometric modeling of
financial stability which is
relevant for the region.
CMI/
Member
Countries
June 2013
Wrap Up Session
108. During the wrap up session the delegates made the following comments in order to
increase the effectiveness of the future meetings;
i)
Since the economies in the COMESA region are not sophisticated, there is need to
concentrate on simple tools that are relevant to the region;
ii)
Need to ensure full implementation of the COMESA Framework for financial stability
and base the overall assessment of financial stability on the Shield Ratings System;
iii)
Need to concentrate on practical issues to ensure effective implementation ;
iv)
Need to make available course materials two weeks before the meeting;
v)
Need for those who are trained in this meeting to share their knowledge with other
colleagues in the Financial Stability Unit of their Central Bank.
ANY OTHER BUSINESS
109.
No issues were raised under this agenda item.
ADOPTION OF THE REPORT AND CLOSURE OF THE MEETING
110. In closing the meeting, Mr. Alphonce Ndikubwimana, National Bank of Rwanda thanked
all the delegates for their active participation. He also thanked Mr. Gift Chirozva, Dr. Charles
Abuka, Staff of Bank of Uganda and Reserve Bank of Zimbabwe for putting a lot of effort in
preparing the detailed meeting material and for making presentation. He wished the delegates
safe journey back home.
111. .Mr. Alex Mapako of the Resrve Bank of Zimbabwe, on his behalf and on behalf of the
of the delegates thanked COMESA Monetary Institute for organising the meeting. He also
thanked Mr. Gift Chirozva, Dr. Charles Abuka and all others for their efforts in preparing the
valuable training materials and for facilitating the meeting . He further thanked all those
involved in servicing the meeting.
CS/CMI/FSDSS/7/5
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LIST OF PARTICIPANTS/LISTE DES PARTICIPANTS
BURUNDI
Mr. Nganikiye Balthazar, Superviseur Bancaire, Banque de la République du Burundi, B.P. 705,
Bujumbura ; Tel: +257 22 204010 / +257 79580542 (Mobile) ; Email: [email protected] /
[email protected]
Ms. Hatungimana Claire, Responsable-Adjoint du Département de la Supervision Bancaire,
Banque de la République du Burundi, B.P. 705, Bujumbura ; Tel: +257 22222265 ; Email:
[email protected]
Mr. Ndayisenga Paulin, Cadre du Service des Études et Statistiques, Banque de la République
du Burundi, B.P. 705, Bujumbura ; Tel: +257 22 204072 ; Fax : +257 22 223128 ; Email:
[email protected] / [email protected]
Mr. Kaboneke Boniface, Responsable Adjoint du service Marchés Monétaire et Financier ;
Banque de la République du Burundi, B.P. 705, Bujumbura ; Tel: +257 22 204029 ; Fax : +257
22 223128 ; Email: [email protected]
EGYPT/ÉGYPTE
Mr. Mohamed Afify Allam, General Manager, Central Bank of Egypt, 54 Gomhoria St., Cairo;
Tel: +207 002 269 712; Email: [email protected]
Mr. Ahmed Sahloul, Quantative Risk analyst, Central Bank of Egypt, 54 Gomhoria St., Cairo;
Tel: +201118262737; Email: [email protected]
ERITREA/ÉRYTHRÉE
Mr. Kesete Habte Sebhatu, Senior Supervisor, Bank of Eritrea, PO Box 849, Asmara; Tel: +291
1 120177; Fax: +291 1 123162; Email: [email protected] / [email protected]
Mr. Berhane Ghebreslasie, Senior Supervisor, Bank of Eritrea, PO Box 849, Asmara; Tel: +291
1 125218; Fax: +291 1 123162; Email: [email protected] / [email protected]
KENYA
Mr. Edwin Kipsitet, Assistant Manager, Central Bank of Kenya, P. O. Box 60000 00200 Nairobi,
Tel: +254 20 2863025; Email: [email protected]
LIBYA/LIBYE
Dr. Ezzeddin Ashur, deputy Driector of Research and Statistiscs, Central Bank of Libya, P.O.
Box 1103, Tripoli, Tel: +218 21 4776022; Fax: +218 21 4773903; Email: [email protected]
MADAGASCAR
Mme Rabarisoa Ramangalahy Volatiana Zoely, Directrice CSBF, Banque Centrale de
Madagascar, BP 550, Antananarivo 101 ; Tel : +261 340 565 655 ; Email :
[email protected]
MALAWI
CS/CMI/FSDSS/7/5
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Ms. Angela Mjojo, Principal Economist (Financial Stability), Reserve Bank of Malawi, P.O Box
30063, Lilongwe 3; Tel: +265 1 770600; Fax: +265 1 770593; Email: [email protected]
MAURITUS/MAURICE
Mr. Karankumar Pitteea, Analyst – Economic Analysis Division, Bank of Mauritius, Sir William
Newton Street, Port Louis, Tel: +230 206 5619; Fax: +230 211 1355; Email:
[email protected]
RWANDA
Mr. Ndikubwimana Alphonse, Manager, Financial Stability Analysis, National Bank of Rwanda,
P.O Box 531, Kigali, Tel: +250 788 308 963; Email: [email protected]
SEYCHELLES
Mr. James Bernard Jean, Financial Services Analyst, Central Bank of Seychelles; Tel: +248 428
2080; Fax: +248 432 3665; Email: [email protected]
SUDAN/SOUDAN
Mr. Adil Fadlalla Elsheikh, Head of Financial Institutions Section, Central Bank of Sudan, PO
Box 313, Khartoum; Tel: +249 912 104 702; Email: [email protected]
Ms. Mashair Mohammed Ibrahim Sabir, Central Bank of Sudan, P.O. Box 313, Khartoum, Tel:
+249 187 056 564; Email: [email protected]
Mr. Abdelaziz Mohamed Abdelrhman, Supervisor, Central Bank of Sudan, P.O. Box 313,
Khartoum, Tel: +247 187 056 556; Fax: +247 183 771 482; Email: [email protected]
SWAZILAND
Ms. Rejoice Dlamini, Senior Economist, Central Bank of Swaziland, P.O. Box 546, Mbabane,
Tel: +268 2408 2338; Fax: +268 240038, Email: [email protected]
Mr. Wellington Motsa, Manager, Bank supervision (Off-site Monitoring) Central Bank of
Swaziland, P.O. Box 546, Mbabane H100, Tel: +268 2408 2159; Fax: +268 2404 7219, Email:
[email protected]
UGANDA/OUGANDA
Ms. Justine Bagyenda, Executive Director, Supervision, Bank of Uganda, Tel: +256 414
230051, Fax: +256 414 258515, Email:[email protected]
Ms. Pamela Kahwa, Senior Banking Officer, Micro Stress Testing, Bank of Uganda, PO Box
7120, Kampala; Tel: +256 783 147 972; Email: [email protected]
Mr. Peter Mugisa, Head of Financial Surveillance Section, Bank of Uganda, P.O. Box 7120,
Kampala, Tel: +256 701 540 060; Email: [email protected]
CS/CMI/FSDSS/7/5
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ZIMBABWE
Mr. Tinashe C. Bvirindi, Senior Bank Examiner, Reserve Bank of Zimbabwe (RBZ), 80 Samora
Machel Avenue, Harare; Tel: +263 4 703000; Email: [email protected] / [email protected]
Mr. Alex Mapako, Senior Bank Examiner, Reserve Bank of Zimbabwe (RBZ), 80 Samora
Machel Avenue, Harare; Tel: +263 4 703000; Email: [email protected] /
[email protected]
CONSULTANTS
Mr. Gift Chirozva, Chief Bank Examiner, Reserve Bank of Zimbabwe (RBZ), 80 Samora Machel
Avenue, Harare; Tel: +263 4 703 000; Fax: +263 4 705 928; Email: [email protected]
Dr. Charles Augustine Abuka, Director Financial Stability, Bank of Uganda, Plat 45 Kampala Rd,
PO Box 7120, Kampala; Tel: +256 752 344 078; Fax: +256 414 258 063; Email:
[email protected]
COMESA MONETARY INSTITUTE/INSTITUT MONÉTAIRE DU COMESA
Mr. Ibrahim Zeidy, Director, COMESA Monetary Institute, Nairobi; Tel: +254 787 408269 ; email:
[email protected]/ [email protected]
Mr. Zorodzo Chuma, Economist, COMESA Monetary Institute, Nairobi; Tel: +254 715 777 441;
Email: [email protected]
Mrs. Monica Cherwon, Administrative Assistant , c/o Central Bank of Kenya, P. O. Box 60000
00200 Nairobi, Kenya ,Tel: +254 8646207/190, Email: [email protected]
COMESA SECRETARIAT
Ms. Mary M. Ndoti, Senior Secretary, COMESA Secretariat, P.O. Box 30051, Lusaka, Tel: +260
211 229725 – 31 Fax: +260 211 225107; email: [email protected]
Ms. Catherine Mwaba, Senior Bilingual Secretary, COMESA Secretariat, P.O. Box 30051,
Lusaka, Tel: +260 211 229725 – 31 Fax: +260 211 225107; email: [email protected]
INTEPRETERS/INTERPRÈTES
Mr. C.K. Sokpor-Dufe, Conference Interpreter, Lingua-Verbus Conference Consultants, PO Box
2581-00200, Nairobi; Tel: +254 722 707 165; Email: [email protected]
Mr. Benoit Mugenzi, Interpreter, Interlingua, PO Box 61544-00-200; Tel: +254 728 596 407;
Email: [email protected]
Mr. Butarama Martin, PO Box 61544 00200 Nairobi; Tel: +254 715 961 447; Email: martin.
[email protected]
TRANSLATOR/TRADUCTEURS
Ms. Christiane Adotevi-McWest, Translator, PO Box 66446-00800, Nairobi; Tel: +254 733 869
350; Email: [email protected]
Mr. Koku Mawena Kudo,
[email protected]
Translator,
Nairobi;
Tel:
+254
734
902
422;
Email:
CS/CMI/FSDSS/7/5
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