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CS/CMI/FSDSSC/VIII/5August, 2013

Original: ENGLISH

COMMON MARKET FOR EASTERNAND SOUTHERN AFRICA

Eighth Meeting of the Financial System Development and Stability Sub-Committee

24 August, 2013Nairobi, Kenya

REPORT OF

THE EIGHTH MEETING OF THE COMESA FINANCIAL SYSTEM DEVELOPMENT AND STABILITY SUB-COMMITTEE

2013 (IZ/mkc/mk)

CS/CMI/FSDSSC/VIII/5Page 1

A. INTRODUCTION

1. The Eighteenth Meeting of the COMESA Committee of Governors of Central Banks which was held in Kigali, Rwanda in December 2012 instructed the COMESA Monetary Institute to undertake the following activities in 2013:

a) Workshops on the following:

i) Macro Stress Testing for Financial Stability Analysis; andii) Macro-Econometric Modeling for Assessing Financial Stability

b) Preparation of a Manual for Implementing the COMESA Assessment Framework for Financial System Stability.

2. Based on the above decisions, the Institute organized three workshops from 12-23 August, 2013 in Nairobi, Kenya.

3. The core objectives of the workshops are:

i) Build capacity of member countries to enable them to implement the COMESA Framework for Assessing Financial System Stability; and

ii) Contribute to knowledge sharing and networking between member States on issues related to financial system stability.

4. More specifically, the workshops provided the following:

i) Discussion on current stress testing frameworks in use for financial stability assessment in COMESA member states and provided guidance on its use in the context of a forward looking financial stability analysis;

ii) A structured, comprehensive, and conceptually sound analytical framework for the assessment and measurement of systemic stability overtime and across nations; and

iii) Reviewed the Draft Manual for implementing the COMESA Framework for Assessing Financial System Stability.

5. The workshops were attended by experts from member countries Central Banks Research and Bank Supervision Departments whose duties involve the assessment of the financial system stability.


6. The reports of the workshops were submitted to the Eighth Meeting of the COMESA Financial System Development and Stability Sub-Committee which was held on 24 August, 2013 in Nairobi, Kenya.


B. ATTENDANCE, OPENING OF THE MEETING, ELECTION OF THE BUREAU, ADOPTION OF THE AGENDA AND ORGANISATION OF WORK

Attendance

7. The meeting was attended by delegates from Burundi, D R Congo, Egypt, Kenya, Madagascar, Malawi, Rwanda, Sudan, Swaziland, Uganda and Zambia.

Opening of the Meeting

8. The Chairman welcomed the delegates and called the meeting to order.

Election of the Bureau

9. The following central banks were elected as members of the Bureau for the Sub-Committee for 2014.

i. Reserve Bank of Malawi: Chairii. Bank of Zambia: Rapporteur

Adoption of the Agenda and Organisation of Work (Agenda item 2)

10. The meeting adopted the following agenda:

1. Opening of the meeting

2. Adoption of the Agenda and Organisation of Work

3. Consideration of the Report on the following

a) Country Report on Implementation of the COMESA Assessment Framework for Financial System Stability

b) Workshops on:

i) Macro-Econometric Modeling for Assessing Financial System Stability;

ii) Validation of Manual for Implementation of the COMESA Framework for Assessing Financial System Stability; and

iii) Macro stress testing.

4. Proposal by African Trade Insurance Agency (ATI) on the use of Political and Commercial Risk Insurance as a Risk Mitigation Tool for Banks and its Potential Impact on the Capital Allocation Rule

5. Work Plan for the COMESA Financial System Development and Stability Sub-Committee for the year 2014

6. Any Other Business


7. Adoption of the Report and Closure of the Meeting

Consideration of the Report on the following:

a) Country Reports on Implementation of the COMESA Assessment Framework for Financial System Stability (Agenda item 3(a))

11. The meeting noted that delegates from member countries reported on the status of implementations of the COMESA Assessment Framework for Financial System Stability as contained below in table 1. The report focused on the following:

a) Establishment of a Financial Stability Unit;

b) Establishment of a Financial Stability Committee and Terms of Reference;

c) Development of in-country Strategic Implementation and Action Plans;

d) Production of forward looking Financial Stability Reports incorporating, among other issues, Financial Stability Assessments and SHIELDS ratings.

12. The meeting also noted the following from member countries reports:

a) Most COMESA member states have set up Financial Stability Units;

b) The member states are at various stages of setting up the Financial Stability Committees;

c) Member countries are still working toward the conduct of SHIELDS ratings of financial stability once the requisite institutional and logistical arrangements have been finalised; and

d) The financial stability assessments and macro-prudential supervision are new concepts, which have gained increased attention following the global financial crisis. As such, there are still a number of challenges in respect of resources and skills endowment.

Status of Implementation of the COMESA Financial Stability Assessment Framework by Member States

No. Task Activity Completion Date

Status of Implementation

ImplementedWork In

Progress

1 Financial Stability Unit Establish Financial Stability Unit 31 January 2012

Burundi, DRC, Egypt, Kenya,

Mauritius, Rwanda, Sudan,

Madagascar, Malawi,

Zimbabwe, Uganda, Zambia

Swaziland

2 Financial Stability Committee

Establish a multi-disciplinary Financial Stability Committee

31 March 2012 Egypt, Kenya, Mauritius, Malawi, Rwanda, Sudan,

Uganda,

Madagascar, Swaziland, DRC, Zambia, Burundi


Zimbabwe

3 Strategic Plan

Develop in-country Strategic Implementation Plan covering institutional structures and chosen methodologies and/or modalities for:• Information gathering;• Data analysis;• Interpretation of the results;• Policy Recommendations;• Policy Implementation.

31 March 2012

Egypt, Kenya, Mauritius,

Rwanda, Uganda, Madagascar,

Zimbabwe, Swaziland, DRC, Sudan, Malawi, Zambia, Burundi

4 Action Plan

Develop in-country Action Plan for Implementation of COMESA Framework covering:• Conduct of consultative meetings and/or meetings with other stakeholders;• Establishment of technical subcommittee where necessary;• Issuance of customized guidance on on-going surveillance, diagnostic assessment, and policy actions;• Review of legislation where necessary;• Roll-out of the Framework.

31 March 2012Kenya, Mauritius, Rwanda, Uganda,

Egypt

Sudan, Swaziland, DRC,

Malawi, Madagascar, Zimbabwe,

Burundi, Zambia

5 Financial Stability Assessment

Implement Financial Stability Assessment Framework incorporating:• Financial Stability Report (FSR) in Prescribed Format;• Financial Stability Assessment Matrix;• GLYOR five-tier coding system;• Financial Soundness Indicators (FSIs);• Macro-prudential analysis;• Stress testing;• Household Sector Survey Results;• SHIELDS Rating System.

30 September 2011

Kenya, Mauritius, Uganda, Rwanda,

Swaziland, Sudan, DRC,

Malawi, Madagascar ,

Zimbabwe, Burundi, Egypt,

Zambia

6Financial Stability Assessment Reports

Electronic submission of Financial Stability Assessment Reports to the Secretariat for posting onto the COMESA website

31 October 2011 Kenya, Mauritius, Uganda, Rwanda,

Burundi, Egypt, Swaziland,

Sudan, DRC, Malawi,

Madagascar , Zimbabwe,

Zambia

7Financial Soundness Indicators

Electronic submission of Financial Soundness Indicators (FSIs) to the Secretariat for posting onto the COMESA website

60 days after end of each quarter with effect from December 2010

Kenya, Rwanda, Uganda, Sudan, Egypt, Burundi

Mauritius, Malawi, Zimbabwe,

Swaziland, DRC, Zambia,

Madagascar

8

Monitor compliance with the 25 Basel Core Principles for Effective Banking Supervision

Member countries conduct self-evaluations 31 March 2011

Burundi, Egypt, Kenya, Mauritius, Malawi, Rwanda, Sudan, Uganda, Zimbabwe, DRC

Swaziland, Madagascar,

Zambia

Workshop on Macro-Econometric Modeling for Assessing Financial System Stability (Agenda item 3(b)(i))


13. The following were discussed under this agenda item:

i) Overview of the COMESA Financial System Stability Assessment Framework

14. The meeting noted the following salient points on the issues discussed under this topic by the workshop:

a) Most COMESA member countries produce financial stability reports lacking in overall financial stability assessment, forward looking outlook and granularity, thereby rendering comparison of financial stability assessment over time within a given country and /or across nations, a daunting task;

b) While there is a proliferation of research in systemic risk and financial stability assessments, the concepts are still evolving; hence there is always room for improvement and learning from each other’s experiences;

c) According to COMESA definition, financial stability means a range of conditions in which the financial system, comprising of financial institutions, financial markets, and financial infrastructure:

i) fulfills its key economic functions and roles with no significant failures, cascading defaults, or adverse systemic impact, current or potential, on the real and/or financial sectors;

ii) is resilient to endogenous and exogenous shocks (current or potential);

iii) facilitates effective assessment, pricing and management of risks;

iv) promotes confidence in, and collective constituents stability of, the financial system even in periods of profound structural change;

d) The COMESA Financial Stability Assessment Framework provides for systematic monitoring of the individual parts of the financial system (institutions, markets, and infrastructure); components of the real economy (households, firms, and public sector); global macro financial developments; and event risk (e.g. catastrophes);

e) The framework provides a structured, comprehensive and conceptually sound analytical framework for the assessment and measurement of systemic stability over time and across nations, via the SHIELDS rating system; and


f) The SHIELDS rating system facilitates the integration of various quantitative and qualitative financial stability analysis into a standard framework, results of which are amenable to comparison over time with a given country and across nations. The construction of the SHIELDS rating system can accommodate any theoretical and empirical advances, judgemental and professional insights as part of the overall assessment of financial system stability.

Discussion

15. Following the presentation, the meeting noted the following:

a) The adoption of the scoring and rating methodologies proposed in the draft handbook will facilitate implementation of the COMESA Financial Stability Assessment Framework in identifying, analyzing, measuring , mitigating, monitoring and reporting financial stability issues, risks and vulnerabilities; and

b) Regarding quality assurance issues related to the assignment of SHIELDS ratings, it was noted that the involvement of a Financial Stability Committee by whatever name it might be called, would be necessary to ensure buy-in, transparency and accountability. It was further noted that there is no one best solution regarding the institutional architecture.

Recommendations

16. The meeting recommended the following:

a) Need for in-country workshops and practical missions, to ensure that a wide spectrum of stakeholders are adequately exposed to the framework and rating methodologies; and

b) The COMESA Monetary Institute (CMI) should conduct in 2014 hands on training on SHIELDS ratings based on a fully-fledged case study and develop a stylised sample solution.

ii) Role, Applicability and Approaches to Macro-Econometric Modelling for Assessing Financial System Stability

17. The meeting noted that the following key issues were highlighted under this topic:

a) In practice, financial stability is a complex phenomenon dependable on iterative interactions of many risks and feedback effects from financial stability to the real economy. As a result some academics and practitioners concur that there will never be one best model for all purposes, hence the need for a suite of models;


b) The use of macro econometric models is subject to on-going debate among prominent economists, since the global financial crisis. Notwithstanding the multidimensional and multifaceted nature of financial stability, there are also calls for fewer as opposed to multiple tools for financial stability assessment. A full array of tools and measurements clouds rather than enhance policy analysis (Hansen (2012);

c) Despite the debates, macro-econometric modelling helps to inform understanding of the empirical state of systemic risk measurement and can play the following important roles:

i) Provide a macro-econometric based criterion to evaluate the success of alternatives of systemic risk measures. The methodologies also facilitate evaluation of the validity of many proposed systemic risk measures, identification of leading, lagging, and coincident indicators;

ii) Assessment of the real economic activity effects of financial stability;

iii) Provide a rigorous approach that aggregates information about financial sector stress and challenges to the real sector activity using multivariate methodologies/approaches;

iv) Provides an Early warning system (EWS) from a large cross section of “risk predictor” variables that contain information regarding the variable of interest;

v) Helps inform interpretation of systemic risk measurements;

vi) Usage of macro-econometric evaluation helps identify commonalities, eliminates redundant tools, leaving a smaller few representative indicators. Empirical analysis suggests that quantile regression methodologies used in CoVaR (Adrian and Brunnermeier 2011); GDP-at-risk (De Nicolo and Lucchetta 2011) have comparatively higher information content regarding systemic stability than other approaches;

d) The meeting also noted that the workshop considered the role and applicability of various approaches to macroeconomic modelling, ranging from those that are high in theoretical coherence to those high in data coherence on the Pagan model classification spectrum; and

e) The meeting further noted that models used for financial stability purposes should take into account certain characteristics that distinguish them from the classical economic models, including contagion, default, heterogeneity and missing markets.


Macro-Econometric Modelling for Assessing Financial System Stability (Agenda item 3(b)(i))

Introduction to Econometrics of Macrofinancial Modelling18. The meeting noted that under this topic, the following were discussed and the participants carried out practical exercises.

a) Basics of Ordinary Least (OLS) Square regressions;b) OLS assumptions and parameter estimation;c) Formulating and testing hypothesis;d) Loading data to Eviews;e) Data transformation and manipulation; andf) Running basic regressions.

Characterising financial cycles and business cycles, and configuring countercyclical capital buffer rules

19. The meeting noted the following key points under this topic.

a) Implications of violations of classical linear regression (CLR) assumptions;

b) Parameter estimates needed to meet the Gauss Markov theorem assumptions for them to be best linear unbiased estimator of the true population regression function;

c) Estimated parameters need to satisfy the desirable properties of efficiency, consistency and unbiasedness;

d) The models that violated these primary assumptions would often fail to

produce reliable forecasts;

e) The current macro-prudential policy debates and the recent efforts of the Basel committee have been directed towards the development and use of macro-prudential tools that reduce procyclicality. In the recent Basel III requirement, the committee identified procyclical capital buffers as important tools to curb procyclicality and suggested that the buffer requirement should be configured on the credit to GDP ratio. It was demonstrated to the workshop through a hands on exercise, the use of filtering techniques such as the Hodrick and Prescott filter, the Baxter and King filter as well as Christiano and Fitzgerald band pass filters in the computation of the excess credit to GDP ratio for the configuration of the countercyclical capital buffer and for the characterisation of the financial cycle and the business cycle; and

f) The characterisations of the financial cycle and the business cycle may

differ from country to country such that the variable that may best serve as indicators for the build-up of the countercyclical capital buffer in the build-up phase of vulnerability may differ from country to country.


Recommendations

20. Countries should identify lead indicators that can be used in configuring the countercyclical capital buffers based on country specific studies.

Long run equation estimation and dynamic analysis

21. The meeting noted the following key issues which were discussed by the workshop under this topic:

a) Theories in economic and finance are based on long run relationships. Regressions that are based only on basic regressions fail to capture long run information in the data series. Techniques such as Cointegration are necessary for capturing long run relationships between variables and the short run dynamics of adjustment to equilibrium in the event of disturbances in the system. The technique helps to separate permanent effects from transitory effects in the model; and

b) During this session, participants estimated single Cointegration equations and performed diagnostic tests on the models using Eviews. These exercises revealed to the participants that the model performance is compromised once assumptions of residuals are violated. And that once a model has failed diagnostic tests, it cannot be used for policy simulations and forecasting.

Modelling Macro-Financial Linkages using Single Equation Models and Multivariate Cointegration Equations

22. The meeting noted that the following key issues were discussed under this topic:

a) Financial stability analysis is a complex phenomenon dependable on the iterative interactions of many risks and feedback effects between the financial system and the macro-economy. These multiple and complex interactions require a suit of models for their estimation. Pagan (2003) specifies a range of models that are currently in use in modelling in central banks. He identifies data coherent models such as Vector Auto Regression (VAR) and Dynamic Aggregative Models as forming part of the suit of models currently in use in central banks;

b) The modelling of macro financial linkages using a dynamic aggregative model was demonstrated to the workshop. The workshop also did practical exercises by estimating a three equation model capturing asset price dynamics, credit market dynamics and money demand;

c) Participants also conducted shock simulations on the model in

question to demonstrate that shocks in variables in one part of the system may be amplified or attenuated through endogenous


interactions between the variables in the system, which may amplify or attenuate risks. Furthermore, participants performed in-sample and out of sample forecasts using the model and then computed the impulse response functions to trace the time profile of shocks on the system. Such exercise allows the central bank to tell in advance how shocks may mutate in the system and thus provides them lead time for policy responses; and

d) The importance of multivariate analysis through multivariate

cointegration equations was also discussed. The use of multivariate equations allows one to understand the permanent effect and temporary effects of shocks to the system in more complete ways and provides for a richer study of the dynamics of adjustment. Is was explained that, these techniques will enable countries to tell the relative importance of different variables in explaining shocks to their systems and to judge the magnitudes of observed variability to target variables that is explained by the identified explaining variables.

23. In the discussions that followed, the meeting was fully convinced that with the rest of the world moving towards the estimation of DSGE models for their economies, it is advisable for countries not to lag far behind in the adoption of techniques for macro-financial modelling. Given the data challenges that face most African countries, the use of relatively simple estimation techniques which need less data such as structural VAR models was, therefore, recommended.

Recommendations


i) CMI should continue to conduct hands on training on financial system stability assessments and econometric modelling, including macro stress testing; and

ii) CMI should organise a workshop in 2014 on Macro-financial modeling using Structural VAR.

Validation Workshop of the Manual for Implementation of the COMESA Framework for Assessing Financial System Stability (Agenda item 3(b)(ii))

25. The meeting noted that under this agenda item the workshop considered the following Manuals which are prepared for enhancing the implementation of the COMESA Assessment Framework for Financial Stability:

a) Forward-looking Financial Stability Reports;b) Micro-stress testing; c) Macro stress testing; andd) COMESA Framework for Financial system stability.

a) Forward-looking Financial Stability Reports


26. The meeting noted the following salient points of the manual under this topic:

a) The recent global economic and financial crisis has demonstrated the need to strengthen cooperation among countries to improve regulatory requirements for the financial system. Under the COMESA framework, the financial stability mandate is being strengthened. COMESA member states have made a decision to improve at each country level the understanding of issues related to stress testing, financial stability analysis and reporting;

b) The manual focused on existing financial stability mandates, functions and stability assessment in individual COMESA member countries. Particular attention was paid to forward looking financial stability analysis, stress-testing and reporting. In the area of financial stability analysis and reports, COMESA countries have resolved to improve the effectiveness of their financial stability frameworks, especially the publication of forward looking financial stability reports. In addition, they are making efforts to provide clear terms of reference for staff working on financial stability assessment;

c) Most Financial Stability Reports that are currently published in COMESA countries focus on the description of past developments and are not sufficiently forward looking. It is however, desirable that the reports should include forward looking statements about risks and vulnerabilities. In order to do this, the tools used in the production of Financial Stability Reports should include stress testing and other forward looking techniques;

d) The following were noted areas for possible Improvement of Financial Stability Reports:

i) The objectives of the Financial Stability Reports should be clarified. This means that the aim of the Reports should be clearly indicated most specifically at the beginning of the report. At the very least the objective should be to identify and analyse risks to the financial system;

ii) The coverage of key systemic risks should be improved. Financial Stability Reports should consistently cover the key systemic risk factors. The discussions in the Financial Stability Reports should be based on the projected trends of financial indicators and results of sensitivity or scenario stress testing. The coverage of risks should be comprehensive to include detailed analysis of risks specific to the domestic financial system. It is important that an analysis of systemic non-bank financial institutions should be included and the discussion of external developments is linked to the domestic financial system;


iii) It is important to include an analytical but not a descriptive coverage of financial market conditions in the discussion of systemic risks. The discussion should provide a comparison of how financial risks have evolved over time. An analysis of interconnectedness of banks as well as cross-border banking linkages should be covered. It is also necessary to regularly provide an analysis of links between banks and non-bank financial sector. Coverage of domestic systemically important financial institutions (DSIFIs) is useful. Finally, an assessment of credit risks arising from the performance of corporate and household sectors is important;

iv) The quantitative content of the Reports should be improved. This can be done by ensuring that Financial Stability Reports present forward looking stress testing results on a regular basis. In cases were data permits, it is important to provide granularity on systemic institutions. The underlying assumptions employed in the quantitative assessments should be provided as well as a description of the methodology used for the stress tests;

v) More discussion of macro-prudential policies is required. Macroprudential policy is better formulated in institutional frameworks that have Financial Stability Committees. Financial Stability Reports should focus on macroprudential measures, with a discussion of policy measures closely tied to the risks and vulnerabilities; and

vi) Financial Stability Reports should point out existing data gaps. Reports should raise any concerns regarding data gaps. This is in regard to data availability or completeness in analysis. In future the region could benefit from the standardization of Financial Stability Reports publication. This is in respect to dates of release, period of coverage and, regularity of the Reports.

Recommendations


a) Financial Stability Reports should discuss the risks, transmission channels, impact and measures available to mitigate the risks. The Reports should discuss what might happen in the future rather than describe historical developments;

b) The priority in all Financial Stability Reports should be to provide the stakeholders with analytically supported assessment of vulnerabilities and risks that could threaten financial stability in a systemic way in the country; and

c) Member state central banks should attempt to move towards the standardization of Financial Stability Reports. The proposed new,


risk focused and forward looking Financial Stability Report may be organized in four or five Chapters and Appendices as shown in Box 1 below:

Box 1: Suggested Outline for Forward Looking Financial Stability Reports

Chapter 1: Overview And Executive Summary: a two-to-three Page Summary Focused on Briefly Identifying the Main Threats to Systemic Stability and Measures to Prevent them or Mitigate the Consequences.Chapter 2: Economic And Financial Conditions: (Domestic and External) Vulnerabilities To The Outlook.Chapter 3: Main Risk Scenarios (e.g. Stability Implications of External Demand Shocks or Liquidity Problems on the Banking System): Future Prospects, Risks and Stress Tests).Chapter 4: Conclusions and Policy Recommendations: This should be Recommendations for Preventing Systemic Problems or Dealing with them if Prevention Fails. This Section may also Review Developments in Macroprudential Policy Since the last Report.Appendix I: Special Topic: This Should delve more Deeply but Concisely into Important Existing Vulnerabilities and Sources of Risks or Policy Challenges.Appendix II: Statistical Tables: Financial Soundness Indicators And Consolidated Balance Sheet of the Banking Sector.

b) Micro Stress Testing

28. The meeting noted the following major issues which were discussed under this topic:

a) The micro stress testing should complement existing analytical tools within the COMESA member countries. The exercise should be aimed at assessing the resilience of commercial banks to adverse developments and contributes to the overall assessment of systemic risk. However, it should be noted that the framework is initially of limited form, consisting mainly of sensitivity tests and does not include macro-scenario analysis. The risks that should be assessed include credit risk, liquidity risk, interest rate risk and foreign exchange risk;

b) The stress testing framework initiates the process of broadening existing analytical processes to include other types of risks. In addition, it begins the process of moving from single factor sensitivity analysis towards macro-scenario analyses. All the while, users should recognise that this move requires a greater understanding of the inter-linkages in the financial system and spill-over effects between the markets, institutions and sub-sectors of the financial system;

c) The stress tests should be applied to bank level data as at the end of each reporting period. Depending on the structure of a country’s financial system, the shocks envisaged are relatively straight forward. However, as financial systems get more sophisticated and the types of exposure change, the underlying framework will have to be modified.


Some of the improvements will relate to estimating econometrically some of the relationships that are initially assumed;

d) Purpose and Perspectives of Micro Stress Testing Exercise in the COMESA Region include the following:

i) Country level working groups on stress-testing, consisting of representatives of all departments and regulatory institutions, should be established with the following primary tasks: development of methodology, scenarios and aggregation of results. The working group should have representation from their supervisory and financial stability departments. The Group’s mandate may include preparation of a proposal to the heads of central banks on timing, scope and objectives of the stress testing exercise, scenarios, share information, discuss results and prepare a final report;

ii) In order to proceed properly in the stress testing work each COMESA Central Bank should address these organizational issues:

a. have its own stress testing model for micro stress testing; b. familiarize itself with the models and risk management

practice of commercial banks; c. run stress testing exercise at home; and d. have precise and monitor constantly data about banks’

cross-border exposures;

iii) In the short term, each central bank needs to start conducting stress testing exercises on a regular basis. Central banks need to enhance cooperation of all parties involved in the financial stability work: these include the banking supervision, economics, research, financial stability units and other financial system regulators. It is important that bottom-up and top-down stress test results are developed and analyzed together to check the consistency and robustness of the results. This would help establish a better understanding of the stress tests themselves and the implications of the results. Such cooperation would also help pool resources from all parties to develop stress testing methodology; and

iv) Conduct liquidity stress tests on a monthly basis and credit stress tests on a semi-annual basis. Credit risk does not tend to change as quickly as liquidity risk. Therefore, conducting credit risk stress testing on a monthly or quarterly basis, as is currently the practice in some countries, would not add much value. Instead, it absorbs resources that could be used in the analyzing and developing more sophisticated and integrated stress testing framework.


Recommendations


a) Member countries should expand and enhance data collection to include real estate prices, cross-border and sectoral exposures;

b) Member countries should improve micro stress testing approaches and skills; and

c) Improve micro-prudential analysis and the design of mitigation measures through greater and more analytical use of financial soundness indicators.

c) Macro Stress Testing

30. The meeting noted that Stress-testing as a framework for forward-looking analysis of systemic risks has developed great appeal among central banks across the world. There are two types of macroeconomic stress-testing, namely top-down stress testing and bottom-up stress-testing. The top-down approach applies a uniform macroeconomic scenario or shock to the system and aggregates results obtained from running this scenario through the banks’ individual stress testing models. By contrast, the bottom-up approach assesses changes in the risk associated with the portfolio and business activities of individual banks using a uniform model and then aggregates the results obtained to map systemic risk. The results of bottom up stress tests are often aggregated to draw macro level insights; however the nature of the tests is largely micro and focused on individual banks.

Recommendations

31. The meeting noted the study recommended that COMESA Member Central Banks countries should continue to take substantial steps to move into integrated stress testing frameworks. However, additional efforts are clearly needed which include the following:

a) Member States should formalise the involvement of high level management of the central banks in the approval of scenarios as well as the results and in discussions with banks regarding their individual results and capital conservation plans;

b) Central Banks should gather information and have regular meetings with primary sources of information, such as the real estate developers, banks and microfinance institutions. These discussions should provide input into stress test scenario formulation;

c) Member States Central Banks should review the existing stress testing methodologies that are employed to assist in identification of systemic vulnerabilities in the financial system;


d) The management of member state central banks should define a potential list of macroprudential policy tools which can be applied once stress tests reveal vulnerabilities in the financial system; and

e) The Member States Central Banks will need to redesign their communication policies to inform what goes into the Financial Stability Reports.

Discussions

32. In the discussions that followed the meeting well received the Manual for Forward-Looking Financial Stability Reports and Stress Testing and made the following comments:

a) The need to address the matter of transparency of country financial stability reports. The issue was whether two versions of FSR’s should be produced, one for internal review and discussion, and another publication for the external stakeholders. The committee agreed that this is a country specific issue and will be decided by the different member state jurisdictions based on their own country situations;

b) The need to exclude the discussion in the Manual of countries that were yet to produce or release their Financial Stability Reports;

c) The Report should include a disclaimer as well as provide more elaborate examples of financial stability reports and stress testing methodologies from COMESA member countries; and

d) The manual should retain micro stress testing aspects while expounding on macro stress testing. This will allow for variations in levels of sophistication of stress tests implemented by member states given differences in the levels of development of the financial sectors in the countries in the region.

Recommendations

33. In addition to the above mentioned observations the meeting recommended the need for further comments on the Manual by all those involved in the financial stability analysis in member countries. The meeting agreed on the following timeliness for the finalization and full validation of the Manual:

i) CMI to receive the initial comments from Member Central Banks by end September 2013;

ii) The comments of member Central Banks to be incorporated in the Manual and circulated for final review by end October 2013; and


iii) The final validated version of the Manual to be ready by 21st November 2013.

d) Validation of the Manual of COMESA Framework for Assessing Financial Stability

34.The meeting noted that the presentations under this agenda item discussed the following:

a) SHIELDS rating;b) Theoretical and empirical justifications of SHIELDS rating; c) The rating and scoring methodology of SHIELDS rating;d) Quantitative and qualitative approaches to assess systemic stability;

and e) How to undertake overall SHIELDS rating.

SHIELDS Rating

35. The meeting noted the following salient points which were discussed under this topic:

a) A rating is an informed opinion and/or expert judgement regarding performance of a subject attribute based on some criteria, methodologies, or rating scale established ex-ante, which criteria may in practice be subject to continuous evaluation and improvement;

b) SHIELDS financial stability ratings provide an informed (based on all known information) forward-looking (includes views about future performance) opinion and/or expert judgement regarding the state of financial stability in a given jurisdiction;

c) Recalling the COMESA definition of financial stability, the SHIELDS rating system facilitates the aggregation of various quantitative and qualitative financial stability analysis into a standard framework, results of which are amenable to comparison over time with a given country and across nations; and

d) The proposed handbook provides guidance on how financial stability practitioners might determine the rating of individual components of as well as the overall SHIELDS on the basis of a five tier GLYOR risk coding system notwithstanding the peculiarities of individual country circumstances.

Theoretical and Empirical Justifications of the SHIELDS Rating System 36. The meeting noted the following salient points discussed under this topic:

a) SHIELDS is an acronym for Solvency Conditions; Home Economic Conditions; Institutional Quality; Earnings Conditions; Liquidity Conditions; Default Conditions; and Systemic Loss, factors which


characterise the state of stability in a given jurisdiction, as informed by developments in the collective or the individual parts of the financial system; components of the real economy; global macro-financial developments; and event risk (e.g. catastrophes);

b) In Goodhart, Sunirand, & Tsomoscos (2004, 2005, 2006) and Tsomocos (2003) and Aspachs et al (2006)’s two factor model suggests overall Financial Stability can be summarised by probability of default (PD) of both banks and economic agents and bank profitability. Episodes of financial instability are characterised by a combination of high probabilities of default and low bank profitability;

c) Blancher et al ’s (2013, p7) tool kit of systemic risk monitoring points out systemic risk can be aggregated at different levels including individual that institutions and markets, transmission channels, and the whole financial system and the economy. In addition they also single out:

i) credit risk (a key source of risk in most financial institutions) as assessed by probabilities of default and loss given default;

ii) liquidity risk as denoted by liquidity ratios, market liquidity and financial institution’s funding conditions;

iii) market risk being sensitivity to volatilities in interest rate, exchange rate, or asset price shocks as well as latent vulnerabilities;

iv) Schinasi (2004, p7-8) suggests that financial stability is a broad, multidimensional, and multifaceted concept which occurs on a continuum. Threats to financial stability can emanate from diverse endogenous and exogenous sources, which cannot be [easily] summarized in a single generally accepted metric/indicator, Schinasi (2004, p4); and

v) In view of the foregoing, SHIELDS anticipates the multiple

sources and causes of financial stress and hence rely on a wide spectrum of quantitative and qualitative evaluation factors, which go beyond the confines of the banking sector.

The Rating and Scoring Methodology of SHIELDS Rating

37. The meeting noted the following salient points which were presented under this topic:

a) Intuitively, assignment of ratings calls for the adoption of a rating criteria, scale or methodology. A rating methodology should ideally identify relevant risk factors to be monitored, tracked and analysed against set benchmarks so as facilitate easy interpretation of the


results. In SHIELDS, the benchmarks are calibrated on the GLYOR scale, which are ordinal measurements expressed in the quintile scale;

b) It was noted that determination of benchmarks has two dimensions, namely choice of the indicator and the applicable threshold. In view of the multi-dimensional and multifaceted of nature of financial stability, policymakers are advised to employ a wide range of indicators as each has its own purpose, merits and limitations;

c) Indicator thresholds may be derived from historical crisis episodes,

international standards setting institutions, as well as statistical methodologies. For illustrative purposes, some of the benchmarks espoused in SHIELDS include:

i) Absolute benchmarks, e.g. CAR; EU Surveillance Framework; The Weighted CAMEL Framework;

ii) Z-scores: Deviations from the mean normalised by the standard deviation;

iii) Quintile Scale is based on quintiles and involves determination of a relevant range, and the scoring between the best ("1") and worst ("5") are based on a sliding scale. Outliners are eliminated ex-ante to avoid distortions;

iv) Percentiles i.e. transform the variables in percentiles, using their sample cumulative distribution function; and

v) Signal Extraction Method whereby the thresholds are set at parameters which minimises the noise to signal ratio of the early warning indicator; and

d) In addition, he highlighted extracts of the literature containing some useful benchmarks such as The new EU Macroeconomic Imbalances Monitoring Procedure; USAID & Partners for Financial Stability; The Weighted CAMELS Framework; Lindgren, Garcia & Saal (1996); Demirguc-Kunt and Detragiache (1998); Laeven & Valencia Data Set 2012; Reinhart & Rogoff (2009); Kaminsky & Reinhart (1999) Signal Extraction Model; Financial Soundness Indicators (FSI) and several other indicators proposed in IMF working papers.

Quantitative Techniques to Assess Systemic Stability – Selected Examples

38. Under this topic, the meeting noted that there are several quantitative techniques to assess financial stability, each of them with advantages and limitations, examples being:

a) Stress-tests techniques which allow for the identification of potential shocks and estimate the financial system resistance, but not a


comparative portrait of the level of stability over time and across nations. Stress tests may be based on balance sheet or market data;

b) The Early Warning Systems (EWS), the Signal Extraction Approach developed by Kamisky and Reinhart (1999), are noted in the literature to be the most popular and involves the following steps:

i) identifying historical crisis episodes;ii) selecting leading indicators as predictors of crisis episodes;iii) setting threshold values of the selected leading indicators;iv) constructing composite leading indicators;v) watching for red signals and responding appropriately;

c) Construction of Aggregate Financial Stability Index (AFSI), intuitively, facilitates comparisons over time, and represents beside theEWS, one of the popular quantitative measures of financial stability. The approach is currently weighed down by proliferation of alternative indexes. In order to construct an AFSI, the following steps need to be followed:

i) Selection of individual indicators; ii) Selection of normalization and weighting method; iii) Aggregation of individual values into the composite (or partial)

index. Once the econometric relation between the AFSI and a group of macroeconomic variables is validated, there exists forecasting possibilities to assess the future stability;

d) Market Data Based Methods including Distance to Default, Merton Models, Contingent Claim Analysis, whose applicability in developing nations are often limited by data availability.

Qualitative Approaches to Stability: Example of Expert Opinion Index

39. The meeting noted that the operationalization of this technique involves development of a comprehensive questionnaire covering all the relevant evaluation factors. The questionnaire is administered to experts in the field of systemic risk who are required to rate each attribute on a scale of “1” being the best, and “5” being the worst. Results of this approach are aggregated into a financial stability index. As expected, for the results of this approach to be reliable, procedures followed should be statistically valid.

Overall SHIELDS Rating

40. The meeting noted the following salient points under this topic:

a) Each component of SHIELDS is assessed / rated using various metrics & qualitative considerations. A similar approach is used in the CAMELS system. Each component rating may be assigned a rating on a scale of “1” to “5” with “1” being the best possible and “5” the worst. A composite financial stability rating (systemic stability) is derived from the seven component ratings;


b) A practical exercise was based on the Weighted CAMELS Rating Framework;

c) In SHIELDS quantitative models used should inform the policymaker rather than being automatic determinants of the ultimate decision. Accordingly, qualitative analysis, based on informed judgement, still plays an important role in financial stability; and

d) Prospective users of the draft handbook should bear in mind that it provides guidance and is not intended to replace the need for professional judgement and advice relevant to the particular circumstances.

Discussions

41. In the discussions that followed the meetin appreciated the amount of work done to date. However, they observed that the Manual does not contain practical and clear step-by-step examples on how the SHIELDS ratings will be determined.

42. It was therefore agreed that the consultant would revise the Manual to make it short on background materials, especially the definitions, and put more emphasis on the descriptions of the scoring and rating methodologies in order to provide practical guidance that is easy to follow.

43. Regarding the call to have step-by-step guidance similar to an E-VIEWS Manual, the consultant advised that it may be erroneous to have such expectations, as in prudential matters the most important issue is human capital, i.e. the ability to make informed professional judgment. He reiterated that a rating is an informed opinion and/or expert judgment, and that economic policy matters cannot be reduced to a tick-box type of a manual. He also pointed out that even prudential risk management guidelines do not follow a “click “ and “tick” approach but provide parameters or rules regarding how the decisions should be made.

Recommendations 44. The meeting recommended the following:

a) The consultant should revise the SHIELDS rating section of the Manual by providing numerical examples by 30 September 2013. He should elaborate the steps that should be followed to assign the ratings and undertaking of the SHIELDS Rating System Assessment;

b) The revised manual will be validated via electronic means, following circulation to Central Banks by CMI, by 31 October 2013. A revised version incorporating comments from member countries should be ready by 21 November 2013; and


c) Member countries should expedite implementation of the COMESA Framework for Financial Stability Assessment.

Workshop on Macro Stress Testing (Agenda item 3 (b)(iii))

45. The meeting noted that under this agenda item the following among others were discussed:

a) Analysis of Key Risks to the Financial System and the Steps in the Implementation of Stress Tests;

b) Interbank Network Analysis;c) Designing Scenarios and Monitoring Systemic risk;d) Macro stress testing for credit risk, Interpretation; and e) The main limitation of macro financial stress tests.

Analysis of Key Risks to the Financial System and the Steps in the Implementation of Stress Tests

46. The meeting noted the following key highlights of the presentations under this topic:

a) Two major approaches to the analysis of key risks to the financial system, namely the balance sheet approach (BSA) and Financial Soundness Indicators. The FSIs on capital adequacy, profitability, asset quality and liquidity were discussed in detail;

b) Initial stages of financial system analysis involves the assessment of historical and current banking sector conditions; the assessment of risk exposures and possible internal disturbances to the financial system and assessment of possible disturbances external to the financial system from the general economy or financial markets; and

c) The main steps in implementing macro stress tests, which include: identification of specific vulnerabilities or areas of concern; construction of scenarios using consistent macroeconomic frameworks, the mapping of scenario into forms usable for analysis of financial institutions balance sheets and income statements, the performance of numerical analysis, the consideration of second round effects and finally summarizing and interpreting the results.

Interbank Network Analysis

47. The meeting noted that under this topic the following were discussed:

a) The basic theory on network modeling and its application in the assessment of contagion risk in the banking sector;

b) Using network theory, participants were able to understand the structure of the banking system as implied by the connections to their bilateral interbank exposures; and


c) Participants also learnt that network analysis was a powerful methodological tool for modeling interactions between agents.

Designing Scenarios and Monitoring Systemic Liquidity risk

48. The meeting noted the following were discussed under this topic:

a) Different types of scenarios used in stress testing methodologies were identified and explained to participants. Members also got a better appreciation of the historical and the hypothetical approaches of scenario construction. Examples of stress test scenarios were presented with particular focus on plausible scenarios in the COMESA region;

b) During the practical session on designing macro scenarios, the balance sheet approach and Financial Soundness Indicator approach were presented. It has also noted that participants became familiar with both approaches and used the data from case study to identify plausible shocks to the economy; and

c) The concept of systemic liquidity risk and the different types of measuring systemic liquidity risk were presented. The focus of this presentation was the liquidity stress testing framework which is being carried out by different central banks and IMF. Participants of the workshop agreed to modify these stress tests to suit country specific situations and use these tests in conjunction with the newly introduced liquidity standards in Basel III. A presentation was also made on a case study on macro stress testing of liquidity using simulated bank run method and network theory.

Macro Stress Testing for Credit Risk, Interpretation, and Limitation of Stress Tests

49. The meeting noted that under this topic the following were discussed:

a) Participants were introduced to the methods of mapping macroeconomic changes into credit risk provisioning losses and credit losses;

b) Ugandan data was used to study, non-performing loans to total loans ratio as a function of different macroeconomic variables (interest rates, exchange rates, GDP growth);

c) The presentations also brought together all the information that goes into the stress test including model results and impact of macro-economic shocks to the banking sector; and

d) The limitations of macro stress testing were highlighted including model risks and accuracy of forecasts of macroeconomic variables.


Recommendations

50. The participants of the workshop recommended that CMI organises a workshop on macro-prudential policy tools and their relevance to COMESA Member States.

51. Member countries should continue to build their data bases over longer periods of time to enhance their macro stress testing capabilities. This may require the collection of historical bank-by-bank data over at least seven years for high frequency data and for at least two business cycles for those interested in more long run investigations.

Proposal by African Trade Insurance Agency (ATI) on the use of Political and Commercial Risk Insurance as a Risk Mitigation Tool for Banks and its Potential Impact on the Capital Allocation Rule (Agenda item 4)

52. The meeting noted that ATI is a multilateral political and commercial risk insurance company, with COMESA member states as main shareholders. It has an A rating from S & P and a base capital of 156 Million USD. It was set up at the initiative of the World Bank and COMESA in 2001 to help to attract investments in its member states by taking the political and commercial risks away from the investors and their banks. ATI also improves the trade with and within member states by insuring the risk of default by buyers and bank borrowers.

53. The meeting also noted the following requests from ATI:

a) That the central banks allow banks to substantially reduce the capital that they have to allocate to transactions in so far these transactions are insured by ATI. The Basel framework would allow a relief of 80% for a security given by an “S & P” A rated company;

b) That the central banks allow banks to increase their single obligor limit proportionally to the amount of that exposure that is insured by ATI; and

c) That the central banks allow ATI to participate in the activity of the credit bureaus, so that it is more effective at assessing the credit risk on private obligators.

54. The meeting further noted that in view of the above, the Governors decided that the proposal should be studied by the Financial System Development and Stability Sub-Committee prior to its submission to Governors for their consideration.

Discussions

55. Following the presentation, a large number of questions were raised. The most relevant, together with the answer provided are, include:

Q: How can the proposed reduction in capital allocation be adjusted in case of downgrade of ATI?


A: It would be logical that the central banks introduce a general rule, not only for ATI but also for other multilaterals, that links the capital relief to one or more objective criteria, e.g. their credit rating

Q: How does ATI price its products?

A: ATI has different pricing mechanisms but essentially the premium will depend on the assessment that ATI makes of the risk linked to an insured transaction.

Q: Why should ATI participate in the credit bureaus?

A: The mission of ATI is to facilitate trade. By insuring the risk of non payment, the suppliers can provide better credit conditions to their clients and pledge or discount invoices with the banks at better conditions. The buyers benefit from longer credit periods and avoid the costs related to LC’s and prepayment.

Q: How do you see ATI access to the credit bureaus?

A: ATI could participate in the same way as a bank does, by reporting to the Credit Bureau on the transactions that it is insuring and by retrieving information when it has to assess new transactions

Q: How does ATI mitigate and spread its risks?

A: ATI is limiting its exposure per transaction, per sector, per country and it also limits the exposure it has on the reinsurance companies to whom it cedes its excess of exposure.

Q: How is ATI regulated?

A: ATI is exempt from local regulation, although it keeps regular contact with the regulators. In practice ATI is regulated by the World Bank that has to approve all significant changes in the operational rules and guidelines. The World Bank also receives the operational reports and attends the board meetings.

56. The meeting made the following comments on the presentation:

a) The adoption of this proposal may enhance the ability of and encourages the commercial banks in COMESA countries to extend credit and credit facilities to trade activities within and between the African countries, which may contribute positively on economic growth and financial stability. It is, therefore, necessary to encourage central banks to accept this proposal.


b) ATI needs to give central banks more information on the costs and benefits of the proposal in order to enable them to make informed decisions.

c) ATI should provide the insurance agreement or underwriting policy and confirm if that is standard for all banks. Further, ATI should provide financial performance for the last five years including shareholding structure plus any other information ATI consider necessary to the regulators to study and revert back as agreed. Also pointed out by Uganda was comparison with other bilateral and multilateral organisations.

Recommendations

57. The meeting recommended the following: a) In order to enable COMESA member Central Banks to make informed decision on the implication of the proposal to their regulatory and supervisory activities, ATI should officially communicate to member countries via CMI, the following:

i) The insurance agreement or underwriting policy and confirm if that is standard for all banks; and

ii) The financial performance for the last five years including shareholding structure plus any other information ATI consider necessary to the regulators to make informed decisions.

iii) Comparison of its agreements with other agreements of bilateral and multilateral organisations

b) There is need to have mechanisms in place to ensure that ATI does not issue guarantees beyond its capital base to guard against speculative underwriting of businesses.

Work plan for Financial System Development and Stability Sub-Committee for the Year 2014 (Agenda item 5)

The work plan was presented by the Director of CMI.

Recommendations

After the presentation, the subcommittee recommended the following:

1. The need for CMI to circulate electronically the Terms of Reference for the Financial System Development and Stability Sub-Committee and the Medium Term Strategic Plans of the CMI to the members of the Sub-Committee.

2. The need for consolidation of the Financial Soundness Indicators for all member countries and put them on the CMI website. It was proposed that the member country, which assumes the chairmanship of the


COMESA Committee of Central Banks should consolidate the information which will be received from member countries. Based on this proposal, the Reserve Bank of Malawi, which will assume chairmanship next year, will be responsible for the consolidation of the 2014 Financial Soundness Indicators of all member countries.

3. Need to ensure that the yearly CMI trainings and workshops avoid repetition and are designed to address varied key financial sector development and stability issues.

No. Task Activity Responsibility Completion Date

1 Financial Stability Unit

Establish Financial Stability Unit Member Countries June 2014

2 Financial Stability Committee

Establish a multi-disciplinary Financial Stability Committee

Member Countries June 2014

3 Strategic Plan Develop in-country Strategic Implementation Plan covering institutional structures and chosen methodologies and/or modalities for: Information gathering; Data analysis; Interpretation of the results; Policy recommendations; and Policy implementation.


4. Macro-prudential policies

Develop sound macro-prudential policies

Member countries

June 2014

5. Action Plan Develop in-country Action Plan for Implementation of COMESA Framework covering: conduct of consultative meetings

and/or meetings with other stakeholders;

establishment of technical subcommittee where necessary;

issuance of customized guidance on on-going surveillance, diagnostic assessment, and policy actions;

production of Financial Stability Reports;

Review of legislation where necessary; and

Roll-out of the Framework.



No. Task Activity Responsibility Completion Date

6 Financial Stability Assessment

Implement Financial Stability Assessment Framework incorporating: Forward looking financial Stability

Report (FSR) Financial Stability Assessment

Matrix; GLYOR five-tier coding system; Financial Soundness Indicators

(FSIs); Macro-prudential analysis; Stress testing; and SHIELDS Rating System

Member Countries

June 2014

7 Submission of Forward Looking Financial Stability Reports

Electronic submission of Financial Stability Assessment Reports to the Secretariat for posting onto the COMESA website

CMI/Member Countries

June 2014

8 Financial Soundness Indicators

Electronic submission of IMF Financial Soundness Indicators (FSIs) for banking sector to the Secretariat for posting onto the COMESA website


60 days after end of each quarter with effect from December 2013

10 Capacity Building

Conduct workshops on the following:i) Macro-financial Modelling using

Structural VARii) Macro-prudential policy tools

relevant to COMESA member countries

iii) S.H.I.E.L.D rating based on full-fledged case study


June 2014

Any Other Business (Agenda item 6)

58. No issues were raised under this agenda item.

Closure of the Workshop (Agenda item 7)

59. The meeting adopted the report with amendments. The Chairman thanked delegates for their useful contributions and the resource people for their valuable input in the preparation of the manuals and he expressed his confidence that the workshops and the Manual will greatly assist for enhanced implementation of the COMESA Framework for Assessing Financial System Stability.


LIST OF PARTICIPANTSLISTE DES PARTICIPANTS

Burundi

1. Mr. Balthazar Nganikiye, Bank Superviser, Banque de la République du Burundi ; B.P. 705, Bujumbura, Tel. +257 22 20 4212, Mobile: +257 795 80542, E-mail: [email protected], [email protected]

2. Mr. Prosper Ngendanganya, Bank Superviser, Banque de la République du Burundi ; B.P. 705, Bujumbura, Tel. +257 788 26176, E-mail : [email protected]

3. Mr. Roger Ntwenguye, Bank Superviser, Banque de la République du Burundi ; B.P. 705, Bujumbura, Tel. +257 79 973 643, E-mail : [email protected]

Democratic Republic of Congo

4. Mr. Djamba Tambwe Eluhu, Economic Analyst, Central Bank of Congo; P.O. Box 2697, Kinshasa 1, Tel. +243 81 88 05 152, Fax. +243 81 30 10 959, E-mail: [email protected]; [email protected]

5. Mr. Difumba Lumuna Alain, Economiste Analyste Secteur Institution Financiers, Banque Central Du Congo ; P.O. Box 2697, Kinshasa 1, Tel. +243 81772 8019, E-mail : [email protected]

Egypt

6. Ms. Omnia Sherif, General Manager, Central Bank of Egypt, P.O. Box 54 El Gomhoreya Street, Downtown Cairo; Tel. +202 2770 1674, Fax. +202 2597 6021, E-mail: [email protected]

7. Mr. Ahmed Sahlool, Quantitative Risk Analyst, Central Bank of Egypt; 54 El-Gomhoreya Street 11511, Cairo, Tel. +20 16777 1643, E-mail: [email protected]

Kenya

8. Mr. Daniel K. A. Tallam, Central Bank of Kenya; P.O. Box 60000-0200, Haile Selassie Ave, Nairobi, Tel. +254 020 286 3216, Fax. +254 020 286 3236, E-mail : [email protected]

Madagascar

9. Mr. Falihery Rajaobelina, Fonde de Pouvoirs, Banque Centrale de Madagascar ; BP 550, Antaninarenina, Antananarivo 101, Tel. +261 20 21751, Fax. +261 20 22 24522, E-mail: [email protected]

10.Mr. Tsilavo Haja Ralaindimby, Fonde de Pouvoirs, Banque Centrale de Madagascar ; BP 550, Antaninarenina, Antananarivo 101, Tel. +261 20 21751, Fax. +261 20 22 34532, E-mail: [email protected]

mailto:[email protected]



Malawi

11.Ms. Angela Mjojo, Principal Economist, Financial Stability, Reserve Bank of Malawi; P.O. Box 30063, Lilongwe 3, Tel. +265 1 770600, Fax. +265 1 770593, E-mail: [email protected]

Rwanda

12.Mr. Alphonse Ndikubwimana, Manager, Financial Stability Analysis, National Bank of Rwanda; P.O. Box 531, Kigali, Tel. +250 788 308963, E-mail: [email protected]

Sudan

13.Dr. Magdi Alamin Norain Idom, Central Bank of Sudan; P.O. Box 313, Khartoum, Tel. +249 9123 78141, Fax. +249 178 1341, E-mail: [email protected]

14.Mr. Eissa Ahmed Trayou, Central Bank of Sudan; P.O. Box 313, Khartoum, Tel. +249 0912484941-6574, Fax. +249 0183781341, E-mail: [email protected]

15.Mr. Abdel Aziz M. Abdel Rahman, Bank Supervisor, Central Bank of Sudan; P.O. Box 313, Khartoum, Tel. +249 00249187056556, E-mail: [email protected]

16.Ms. Mashair Mohammed Ibrahim Sabir, Central Bank of Sudan; P.O. Box 313, Khartoum, Tel. +249 187 056564, E-mail: [email protected]

17.Mr. Adil Fadl Alla Elsheikh, Central Bank of Sudan; P.O. Box 313, Khartoum, Tel. +249 00249912104702, E-mail: [email protected]

Swaziland

18.Mr. Wellington Motsa, Manager, Bank Supervision Off-Site Monitoring, Central Bank of Swaziland; P.O. Box 546, Mbabane, Tel. +268 2408 2159, Fax. +268 2404 7219, E-mail: [email protected]

Uganda

19.Ms. Justine Bagyenda, Executive Director Supervision, Bank of Uganda, P.O. Box 7120, Kampala, Tel. +256414258515, Email: [email protected]

20.Mr. Peter Mugisa, Head Financial Surveillance Section, Bank of Uganda; P.O. Box 7120, Kampala, Tel. +256 414 258441, E-mail: [email protected]

Zambia

21.Mr. Raphael Kasonde, Senior Bank Examiner, Bank of Zambia; P.O. Box 30080, Lusaka, Tel. +260 977 847 384, +260 211 228 888, Fax. +260 211 225 656, E-mail: [email protected]

Consultants



22.Mr. Gift Chirozva, Business Operations Director, Deposit Protection Board; P.O. Box 26, Evelyn House, Five Ave. Harare, Tel. +263 4250 900/1, E-mail: [email protected]; [email protected]

23.Dr. Charles Abuka, Directory of Financial Stability, Bank of Uganda, P.O. Box 7120, Kampala, Tel. +256414258441, E-mail: [email protected], [email protected]

COMESA Monetary Institute

24.Mr. Ibrahim A. Zeidy, Director, CMI, P.O. Box 65041-00618, Nairobi, Kenya, E-mail: [email protected] ; [email protected]

25.Mr. Zorodzo Chuma, Economist, E-mail: [email protected] 26.Mrs. Monica Cherwon, Administrative Assistant, E-mail:

[email protected]

Documents

Recommendations - COMESA Monetary Institute …€¦ · Web viewThe use of macro econometric models is subject to on-going debate among prominent economists, since the global financial