For Immediate Release
On May 23 and 24, 2013, the U.S. Agency for International Development (USAID) and the Central Bank of Azerbaijan (CBA) hosted a two-day regional workshop on financial and banking sector stability. Representatives from various countries in Europe, the Caucasus, and Central Asia are participating in the workshop. The workshop discussed the links between the health of a country’s economy and banking sector, and other economic regions such as the Euro zone.
The conference titled as a “Regional Workshop on Macroprudential Supervision” focused on the need for an integrated supervisory approach for a country’s financial system, over and above the supervision of individual institutions. As seen in the global financial crisis and more recently in Europe, individual financial institutions can have a large effect on a county’s financial system. The regulatory framework should thus address the interactions between the two.
“The global economic crisis and the struggles in the Euro zone should serve as lessons for all countries as borders no longer exist when it comes to financial distress” remarked Ronald Glass, Office Director at USAID/Azerbaijan. “This workshop is about taking hard lessons learned and using them to improve systematic responses in the future.”
The event encouraged the regulators to share perspectives on three different circumstances and related vulnerabilities: credit/property booms, lending and borrowing in foreign currencies, and cross-border contagion. With each type of vulnerability, the participants discussed preemptive actions and crisis management.
Leslie Sulenta, Chief of Party of USAID’s Partners for Financial Stability, was impressed with the breadth of the participants as well as their level of engagement. “We have representatives from as far east as Kazakhstan and as far west as Croatia. All were engaged throughout the workshop on addressing issues that in times of financial crisis could transcend national borders, such as events in Croatia could affect banks in Kazakhstan.”
The participants also discussed institutional responsibilities in a country for monitoring and preventing financial crisis and how they should coordinate with each other.
Officials from nearly a dozen central banks and financial agencies attended, including those of Albania, Azerbaijan, Croatia, Georgia, Kazakhstan, Lithuania, Macedonia, Poland, Serbia, Turkey, and Ukraine. Several multilateral financial institutions also participated, such as the European Bank for Reconstruction and Development.
The workshop was facilitated by a team of banking experts from the USAID regional project “Partners for Financial Stability” (see www.pfsprogram.org).
Last updated: March 12, 2014