Bankers Trained to Detect Early Warning Signs for Financial Institutions at Risk

The failure of banks have significant cost in terms of the adverse impact on a country’s financial stability and economic growth especially in developing countries where the financial markets are less developed and financial institutions represent a major share of the financial system.

In addressing this challenge, the COMESA Monetary Institute(CMI) conducted a training programme to help in early detection of distressed financial institutions in order to put in place timely supervisory interventions to mitigate the institution’s failure.

The training themed: “Econometrics for Bank Supervisors and Financial Stability Practitioners with particular Emphasis on Early Warning Models” took place in Nairobi, Kenya from 16th to 20th May, 2016.

The key objective of the training was to develop capacity of Central Bank staff from COMESA member countries. Specifically, the training equipped the participants with econometric skills to build Early Warning Sytems(EWS) models and apply them to individual member country’s banking data.

Director of the COMESA Monetary Institute Mr. Ibrahim Zeidy said the new skills would supplement the techniques which Central Banks were currently using to assess the robustness of financial sector, its exposure to risks and its vulnerability to shocks.

“The training will enable the participants to become good advisors to their policy makers on issues related with financial system stability,” he said.

Eight Central Banks from Burundi, D.R Congo, Djibouti, Kenya, Malawi, Swaziland and Zimbabwe attended the training.