The Central Bank staff from eight COMESA Member countries have been trained on different techniques of assessing financial systems stability, systemic risk and the implementation of macro-prudential policies.
Participants from Central Banks of Egypt, Kenya, Madagascar, Malawi, Sudan, Swaziland, Uganda and Zimbabwe attended the training which was organized was by COMESA Monetary Institute in Nairobi, Kenya from 24 August to 1st September 2015.
The objectives of the training were to equip the participants with appropriate analytical skills and accuracy on macro-prudential tools that are relevant to COMESA member countries. The tools involve assessment of individual financial institutions (e.g. a bank) balance sheet, asset quality, capital adequacy etc.
According to the Director of the COMESA Monetary Institute Mr. Ibrahim Zeidy the training was critical in providing hands-on skills and theoretical exposition on various aspects of assessing the condition in which all financial institutions in a country are able to withstand shocks. This includes mitigating the likelihood of problems in allocating savings to profitable investment opportunities in the economy.
The training was followed by a workshop for validation of Guidelines for Institutional and Governance Framework for Implementation of Macro prudential Policy from 2nd to 4th September 2015 and the Tenth Meeting of the Financial System Development and Stability Sub-Committee on 5th September 2015 in the same venue.
In his address to the participants, Mr. Zeidy described macro prudential tools as necessary ingredients in closing the gap between macroeconomic policy and the traditional micro prudential regulations of the financial institutions.
“Any reform programme of the financial sector that member countries are undertaking would be incomplete, if not supported by appropriate macro prudential policy tools,” Mr. Zeidy stressed. “Developing capacity on these issues will assist COMESA member countries to confront the changing reality of the global financial infrastructure.”
- Systemic risks refer to the possibility that a problem in one financial system such as a bank could trigger severe instability or collapse of the entire financial system and other important economic sectors in the economy.
- Macro-prudential policies are strategies designed to mitigate problems that can impact the whole financial system of a country due to macroeconomic imbalances.