Maintain compliance standards, banks urged

Loss of skilled personnel in central banks has led to ineffective supervision of the financial sector, the regionally owned Macro Economic and Financial Management Institute of Eastern and Southern Africa (MEFMI) has said. MEFMI has been carrying out a study on risk based supervision (RBS) for central banks since July 2015 which culminated in crafting of draft guidelines.Addressing participants of

an RBS study seminar, MEFMI executive director Caleb Fundaga

said it was essential for central banks to implement and maintain international standards of compliance despite loss of skilled personnel.

“We are also cognisant of the fact that central banks continue to lose trained staff to greener pastures and as a result, new staff is often left to grapple without proper guidance.

“In most cases when this happens, the supervisory practices are abandoned and people revert to old ways of doing things, which may be ineffective,” he said.

Mr Fundanga urged central banks to craft benchmarks for compliance with standards to ensure effective regulation and supervision of the banking sector.

“In initiating this study, we hope to address some of these deficiencies by providing member countries with tools that can capture and demonstrate how emerging issues in bank supervision such as Basel II/III, stress testing, macro-prudential surveillance and the Revised Core Principles of Effective Bank Supervision can be incorporated in the RBS approach,” he said.

MEFMI is a co-operative venture among ten southern African countries namely Angola, Botswana, Lesotho, Malawi, Namibia, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

It has many foreign partners, including the IMF, World Bank, and the Swedish Government.

Formerly called the Eastern and Southern African Initiative in Debt and Reserves Management (ESAIDARM), MEFMI strives to improve human and institutional capacity in macroeconomic and financial management on a sustainable basis.

MEFMI offers regional courses, workshops and seminars for

central bank and Government officials in Macroeconomic and Financial Management Programme, Debt Management and Reserves Management Programmes. — New Ziana.