KYRGYZ REPUBLIC: Banking Supervision (IMF Implementation)
A long-term expert in bank supervision began a one-year assignment in Bishkek in January 2016, with financing from FIRST. The 2013 FSAP for the Kyrgyz Republic had found progress but also continued weaknesses in the banking supervisory function. Among the areas identified for improvement were training supervisory staff, enhancing the legal framework, and implementing an RBS process. Some supervisory tools had been developed, including supervisory manuals and memoranda of understanding with foreign supervisors, and there was a need to institutionalize their consistent application. The National Bank of the Kyrgyz Republic (NBKR) had developed an action plan to implement the numerous recommendations in the FSAP report for improving banking supervision.
Main Elements of the Program
The long-term expert is assisting the authorities in strengthening capacity in bank regulation and supervision, with a particular focus on risk-based and consolidated supervision, as part of a joint IMF–World Bank advisory program. The primary focus has been on four efforts:
• Assisting in the development and execution of a high-level strategic plan for risk-based and consolidated supervision, as the key objective
• Providing support in developing a revised regulatory framework in line with international standards to support risk-based and consolidated supervision
• Assisting in the strengthening of prudential guidelines and operational framework
• Training new staff and enhancing the skills of existing staff in banking supervision policies and risk-based supervisory practices
The project is expected to have the following results:
• Full implementation of the new RBS methodology, including more efficient allocation of limited staff resources in order to improve the overall effectiveness of banking supervision
• Improved human resource management, including skills training in a wide range of areas, and enhanced capacity for attracting and retaining competent supervisory personnel
• New or revised NBKR resolutions, guidelines, and regulations to implement FSAP recommendations and the Banking Law once it is adopted, revisions to prudential regulations, and upgraded off-site surveillance reports
• Development and implementation of macroprudential policy instruments based on the most successful and relevant international best practices
This work is in progress, and financing has tentatively been identified to extend the long-term expert’s tenure by two years.