Mumbai, India, March 13, 2009
─IFC, a member of the World Bank Group, is working and sharing knowledge through workshops with bank executives in India and other South Asian countries to help them better manage risks amid the unfolding global financial crisis.
IFC hosted the first workshop today in Mumbai, India, that brought together representatives from international, regional, and national banks and financial institutions to discuss coping strategies and best practices for managing risks during tough times. Senior executives from the Small Industries and Development Bank of India, Kotak, Federal Bank, FINO, HDFC Bank, IDFC, ICICI Bank, Yes Bank also participated in the workshop entitled “Managing Risks in Good Times and Bad.”
Participants shared experiences on risk management and discussed implications of financial-sector policy changes in developed and emerging markets, particularly in response to the turbulent and rapidly changing financial environment. Those lessons learned can guide practitioners and bankers on taking better control of their operations and potential risks.
“Poor risk management practices have resulted in the current financial crisis, causing a severe credit crunch, and banks need to win back investors’ trust,” said Michael Higgins, IFC Banking Specialist. “Through this discussion, we are better placed to understand implications of the international crisis on the financial and banking system and identify possible solutions.”
The workshop helped the banking industry discuss liquidity, operational risk management, corporate governance and risk mitigating approaches. Global banks dealing with severe events especially need to correctly assess risk and address them by insurance or other means.
Justin Yifu Lin, World Bank Chief Economist and Senior Vice President, said, “In addition to fiscal interventions, investments in high-return opportunities in developing economies in such sectors as infrastructure and measures to create demand quickly and efficiently are what’s needed most.”
“We believe that risk management begins with creating a culture to address the issue and realizing the important monitoring role that board members must play,” said Jun Zhang, IFC Manager for South Asia. “This workshop provides an opportunity to exchange ideas and strategies, helping ensure that banks in the region are better prepared in the future.”
IFC is planning similar workshops across South Asia and working closely with banks in the region to help structure robust risk management systems. The effort is part of IFC’s wider strategy to support private sector growth to help create jobs and opportunity. To learn more about IFC’s activities in India, visit
www.ifc.org/southasia
.
About IFC
IFC, a member of the World Bank Group creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, please visit
www.ifc.org
.
