Dhaka, Bangladesh, March 17, 2009
─IFC, a member of the World Bank Group, is engaging with financial institutions in Bangladesh and other South Asian countries to help them better manage risks amid the unfolding global financial crisis.
As part of this effort, IFC hosted a workshop today in Dhaka that brought together representatives from international and local financial institutions to discuss best practices in risk management and implications of financial-sector policy changes, particularly in response to the turbulent and rapidly changing financial environment. This workshop will create awareness among local financial institutions about the global financial crisis and current trends and developments in risk mitigation approaches.
“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, “Managing Risks in Good Times and Bad,” was the second in a series that began on March 13, in Mumbai, India. It helped the banking industry discuss liquidity, operational risk management, corporate governance and risk mitigating approaches.
“To create a robust risk management system, banks need to correctly assess risks and mitigate them through insurance or other means,” asserted Jan P. Mumenthaler, IFC Principal Insurance Officer. “Bangladesh’s insurance market is encouraged to present itself as a reliable and well-performing partner in this process by offering the appropriate solutions for financial institutions.”
Roger D. Handberg, IFC Program Manager for Access to Finance in Bangladesh, said, “So far there has been no major impact on balance sheets of banks in Bangladesh, however this is bound to happen and banks need to be prepared. It is critical for them to consider and implement mitigation measures and the clear lesson from the crisis is to keep an eye on liquidity.”
IFC South Asia, in partnership with the Government of Norway and DFID (United Kingdom), works to support the growth of small and medium enterprises through increased access to finance, an improved business environment and strengthened value chains.
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
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