OREANDA-NEWS. Under the Joint Partnership for Africa (JPA) Program, the African Development Bank, through its African Development Institute (EADI) and in collaboration with the International Monetary Fund (IMF), held a five-day training on “Financial Soundness Indicators (FSIs)” from September 7-11 in Pretoria, South Africa. In recognition of the importance of financial stability, with banking supervision being at the heart of it, the overall objective was to equip officials of the Bank’s Regional Member Countries (RMCs) with requisite skills on how to evaluate and compile their countries’ financial soundness indicators.

The training was in line with the Bank Group’s Financial Sector Development Policy and Strategy 2014–2019 particularly its cross-cutting pillar on Financial Stability and Governance. This pillar aims to build stronger financial sector regulatory and supervisory frameworks, which ensure compliance with national and regional regulations and international best practice; enhance capacity of financial institutions and regulatory and supervisory authorities and create an Africa-wide forum of financial sector policymakers, regulators and supervisors.

To this end, the one-week course covered concepts and definitions, data sources, and techniques for the compilation of FSIs that serve to support macro-prudential analysis. It covered the fundamental aspects of the methodology for the construction of FSIs (such as coverage, aggregation, consolidation, valuation) as contained in the FSIs Compilation Guide, including its 2007 amendments. It also provided information on the Basel regulatory framework for deposit-taking institutions and the way forward with IMF’s work plan on FSIs. The topics were covered through lectures and workshops, including hands-on exercises on the compilation of FSIs

According the EADI’s Task Manager, Cornelius Sebutsoe, the training enabled the participants to share experiences. “The 2008 financial crisis indicated the importance of financial regulation and financial stability. We observed how some developed countries struggled financially in the international financial markets as well as in terms of their respective economic growth rates. It is therefore good that we are all gathered here as regulators to share experiences and learn from one another about how best to go about analysing and reporting of financial soundness to avoid similar occurrences in our countries,” he said.

The course targeted officials from central banks and financial regulatory agencies involved in the collection, compilation and analysis of FSIs attracted 26 participants from 18 English-speaking countries in Africa. In the interest of promoting gender equality 16 of the participants were women resulting in 62% representation. Countries represented included Botswana, Gambia, Ghana, Kenya, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Seychelles, Sierra Leone, South Africa, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.