The World Bank (WB) and International Monetary Fund (IMF) are all set to start a comprehensive and in-depth analysis of Nepal’s financial sector.
At the joint request of the government and Nepal Rastra Bank (NRB), the Financial Sector Assessment Programme (FSAP) is being executed for the first time in Nepal since its establishment in 1999 after the Asian crisis. Around 140 countries have so far completed the programme.
FSAP does an in-depth examination of a country’s financial sector and is executed jointly by the WB and the IMF in developing and emerging countries. Under the programme, the IMF will look after financial stability, while the WB will examine the status of financial development.
A joint team from two institutions are currently in Nepal. The team members held talks with government and NRB officials on Sunday. “Currently, they are in a scoping mission to find the areas of study when the programme starts,” said a finance ministry official. “This mission will prepare the groundwork for preparing detail plan for the future,” the official said, adding another joint team of the World Bank and the IMF will arrive in February for further study.
Under the programme, the IMF will examine the status of liquidity support facilities, resolution regime for troubled banks, legal and institutional arrangement for protection of depositors and status of inter-agency coordination in the situation of systemic crisis.
The programme will also look into supervisory oversight, corporate governance, risk management and internal controls, preventive and corrective actions taken by the regulator and enforcement status.
NRB Deputy Governor Maha Prasad Adhikari said the programme will study vulnerability of the financial system and whether the government and the central bank have the capacity to withstand any shock. “Under the programme, the team will also look after the strength and vulnerability of banks and financial institutions,” he said. “Access to financial services will also come under the programme.”
The World Bank, on the other hand, will look study financial development, under which it will look into the country’s financial development compared to peer countries. It will identify deficiencies in financial infrastructure, mushrooming growth of saving and credit cooperatives and policy challenges such as regulating them through credible oversight arrangement, consolidation, reviewing resolution power of the regulator and restraint in licensing new saving and credit cooperatives.
The FSAP will also perform certain types of stress tests in the banking sector to identify the weak points so that the authorities can improve their financial management, according to the finance ministry. Restructuring of Rastriya Banijya Bank, Nepal Bank and Agriculture Development Bank, and the national payment system development strategy are the other areas the programme will look into, according to the joint team’s presentation.
Each individual country’s FSAP concludes with the preparation of a Financial System Stability Assessment (FSSA), which focuses on issues of relevance to IMF surveillance and is discussed at the IMF Executive Board together with the country’s Article IV report.
source: the kathmandu post,16 Dec 2013
LINK
At the joint request of the government and Nepal Rastra Bank (NRB), the Financial Sector Assessment Programme (FSAP) is being executed for the first time in Nepal since its establishment in 1999 after the Asian crisis. Around 140 countries have so far completed the programme.
FSAP does an in-depth examination of a country’s financial sector and is executed jointly by the WB and the IMF in developing and emerging countries. Under the programme, the IMF will look after financial stability, while the WB will examine the status of financial development.
A joint team from two institutions are currently in Nepal. The team members held talks with government and NRB officials on Sunday. “Currently, they are in a scoping mission to find the areas of study when the programme starts,” said a finance ministry official. “This mission will prepare the groundwork for preparing detail plan for the future,” the official said, adding another joint team of the World Bank and the IMF will arrive in February for further study.
Under the programme, the IMF will examine the status of liquidity support facilities, resolution regime for troubled banks, legal and institutional arrangement for protection of depositors and status of inter-agency coordination in the situation of systemic crisis.
The programme will also look into supervisory oversight, corporate governance, risk management and internal controls, preventive and corrective actions taken by the regulator and enforcement status.
NRB Deputy Governor Maha Prasad Adhikari said the programme will study vulnerability of the financial system and whether the government and the central bank have the capacity to withstand any shock. “Under the programme, the team will also look after the strength and vulnerability of banks and financial institutions,” he said. “Access to financial services will also come under the programme.”
The World Bank, on the other hand, will look study financial development, under which it will look into the country’s financial development compared to peer countries. It will identify deficiencies in financial infrastructure, mushrooming growth of saving and credit cooperatives and policy challenges such as regulating them through credible oversight arrangement, consolidation, reviewing resolution power of the regulator and restraint in licensing new saving and credit cooperatives.
The FSAP will also perform certain types of stress tests in the banking sector to identify the weak points so that the authorities can improve their financial management, according to the finance ministry. Restructuring of Rastriya Banijya Bank, Nepal Bank and Agriculture Development Bank, and the national payment system development strategy are the other areas the programme will look into, according to the joint team’s presentation.
Each individual country’s FSAP concludes with the preparation of a Financial System Stability Assessment (FSSA), which focuses on issues of relevance to IMF surveillance and is discussed at the IMF Executive Board together with the country’s Article IV report.
source: the kathmandu post,16 Dec 2013
LINK
Comments
Post a Comment