Type of Participant Targeted | Course Overview | Course Objective | Learning Objectives | Contact Information
Type of Participant Targeted
The seminar, which has been conducted for more than 13 years, is designed for senior bank supervisors from emerging market economies. These individuals would normally be directors of bank supervision, deputy heads of supervision, or high-level staff involved in, or capable of influencing, policy formulation as it concerns the supervision and regulation of banks in their respective countries. In addition, the participants include a limited number of World Bank staff who are engaged in financial sector work.
In its work in the developing countries, the experience of the World Bank suggests that macroeconomic reforms will be ineffective or counterproductive when a country's financial system is in distress. This occurs because a significant part of the resources which are mobilized by the banking system are used to carry problem borrowers rather than being loaned to productive users of credit. Unless contained by strong prudential supervision and regulation, and effective accounting policies, the bad portfolio grows until insolvency leads to illiquidity and the central bank must intervene as lender of last resort. In such cases, the collapse of several banks, or of a large bank, may cause the sudden contraction of the money supply, the failure of the payments system, sever dislocations in the real economy, and may create real or implicit obligations on the part of the government, as guarantor of depositors, and the lender of last resort. The failure of any bank, no matter how small, may lead to contagion and loss of confidence in the system unless the government can demonstrate its ability to handle bank failures in an orderly and systematic fashion. For these reasons, strong and effective bank supervision and prudential regulation is considered critical if the financial health of developing country banking systems is to be restored and/or maintained.
The objectives of this seminar are to familiarize participants with the importance of bank and financial sector regulation and supervision for economic growth and development; to discuss alternative regulatory and supervisory approaches, and related international trends; to discuss solutions for dealing with bank insolvency and financial system distress; and to build basic supervision and examination skills. At the conclusion of the seminar, participants will be able to better assess the management, asset quality, capital adequacy, earnings, liquidity, and overall financial condition of a bank; will have gained an understanding of means to regulate and supervise financial conglomerates which include banks; will have the ability to better analyze bank financial statements; will be able to make more effective use of prudential reports submitted by banks; and will have improved their on-site examination capabilities.
Participants will understand the implications of financial crisis and the alternatives for restructuring banks. In addition, participants will gain a better understanding of regulations affecting banking institutions and achieve a greater awareness of major regulatory and supervisory topics being discussed at the international level.
Strong and effective bank supervision and prudential regulation are cornerstones of a healthy financial system. Since the 1980s, nearly every financial sector adjustment operation undertaken by the World Bank has included a component for strengthening bank supervision and prudential regulation. Traditionally, in most countries, highly specialized bank supervision and examination skills have been learned on-the-job, with only the largest, most developed countries having the resources to establish training department and training courses. Training, to be extent that it has been conducted in the developing countries, has been narrow in focus and has frequently not kept pace with changes in the outside world.
This seminar will attempt to overcome some of theses shortcomings by bringing together a group of participants form a wide variety of countries. The first week focuses on discussions of the principal policy issues facing bank supervisors in developing countries today. The first week's sessions attempt to establish the linkages between financial system health and macroeconomic performance and the World Bank's general framework for financial sector reform. From these broader discussions, the seminar moves to discussions concerning the causes of financial system distress, the supervisory problems which result, and possible solutions to financial system distress including bank restructure their banking systems.
World Bank staff and a distinguished group of experts form the United States' bank supervisory agencies, the IMF and the Basel Committee lead the first week's discussions.
The second and third weeks of the seminar focus on skills development. Instructors from the Federal Reserve System, discuss bank examination and supervision techniques. Principal topics include: loan portfolio management, credit analysis, classification of assets, bank analysis, foreign exchange risk, interest rate risk, the CAMELS rating system, risk focused examination techniques, and, internal and external auditing. The topics are presented using combination of lecture, class discussion, case studies, group exercise and class presentations. Class participation and interaction are encouraged as an effective means of sharing ideas and learning.
This seminar continues the process of World Bank and Federal Reserve System technical assistance to developing countries in establishing strong and effective bank supervision programs and in providing alternative for the restructuring of distressed banking systems so necessary for restoring economic growth and development.
For additional information please contact
Sarkis D. Yoghourtdjian
Senior Supervisory Financial Analyst
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue,
Washington, DC 20551
fax: (202) 728-5890
Lead Financial Specialist
The World Bank
Room MC9-744, 1818 H Street, NW
Washington, DC 20433
fax: (202) 522-3199
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