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In 1998, the Special Financial Operations Unit (SFO) was created to enable the Bank to respond in a rapid and sustained basis to financial sector crises in three client countries in East Asia – Korea, Thailand and Indonesia. Working closely with the country departments, SFO’s mandate is to provide immediate support to governments to help them stabilize their financial systems, followed by support for structural reforms. While the situations of individual crisis countries (and therefore the approach of the Bank and its partners) have varied, in each case SFO and its partners have pursued assistance strategies comprised of several elements: establishing a resolution framework; restructuring; and building a sound financial system. SFO’s interventions in the crisis countries include policy advice, direct technical assistance, helping governments identify and bring in outside experts and firms, and preparing and supervising the financial sector components of Bank loans.
The immediate programs are directed at reducing instability and uncertainty in the domestic financial markets and assisting governments develop a program and institutional framework to restructure and resolve nonviable financial institutions. Over the longer-term, the goal is to build a stronger and more competitive financial system and an accompanying regulatory system to minimize the likelihood of future problems in the financial sector. |
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