Colombo, Sri Lanka, September 21, 2006 –
In the run-up to the proposed Basel II norms implementation in Sri Lanka in 2008, International Finance Corporation’s South Asia Enterprise Development Facility is facilitating risk management training for the country’s bankers. Improving the capacity of local banks increases access to finance for small enterprises, which is key to private sector growth. At a two-day workshop on risk management, three major forms of financial risk that have minimum capital requirements under the Basel II agreement were covered: market risk, credit risk and operational risk.
The presenter was Dr David Lawrence
,
Exec Director of OpRisk Advisory USA. While talking about the three forms of risk, Dr Lawrence said, “For each of these forms of risks, the Basel Accord sets out a number of risk management methodologies, ranging from the simplest to the most sophisticated.”
The Central Bank of Sri Lanka has mandated that the simplest of these approaches be adopted beginning 1 January 2008. Dr Lawrence elaborated on each of these approaches and the implementation issues associated with them.
In his welcome speech, Gilles Galludec, Country Manager, IFC Sri Lanka and Maldives and Program Manager, SEDF, explained “our recently launched SEDF facility in Colombo is providing assistance to the financial sector in critical skill gap areas. We endeavor to facilitate training and exposure for local bankers to international best practices. Risk management is one crucial area which IFC has identified in consultation with the Central Bank of Sri Lanka and local banks given Sri Lanka’s move towards implementation of Basel II.”
Mr. P. Samarasiri, Director Bank Supervision – Central Bank of Sri Lanka discussed the road map for implementation of Basel II in Sri Lanka in his opening remarks. Participants included risk heads and other operational managers of ten local banks and officials from the Bank Supervision Dept of the Central Bank.
About SEDF
SEDF Sri Lanka Maldives is a multi-donor funded facility managed and operated by IFC, the private sector arm of the World Bank Group. SEDF was launched in Colombo on May 29, 2006 with the objective of promoting the growth of SMEs. A major component is assistance to the local financial sector to enhance internal technical capacities and improve access to finance for SMEs. SEDF provides direct TA to identified partner banks as well as training and exposure programs for the financial sector as a whole.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org.
