Thursday, February 08,
2018 04:39 PM / IMF
Agustin, for the kind introduction, and thank you to the BIS for co-hosting
this important event.
today will focus on how to further strengthen the expertise of our member
countries in financial sector supervision and regulation.
This is an area
where both of our institutions have extensive experience—from providing
hands-on assistance and training, to sharing valuable knowledge across
This is what we
mean by “capacity development.”
It is a major
part of how the IMF and the BIS are promoting financial stability, which
underpins durable and inclusive growth.
We have been
deeply committed to capacity development because, in the words of Benjamin
Franklin, “ an investment in knowledge pays the best interest.”
As you know, in
addition to being a statesman, author, and diplomat, Benjamin Franklin was a
scientist and inventor—focusing relentlessly on applying practical knowledge to
improve the wellbeing of people.
He shared this
passion with his friend Voltaire who once said: “ Aucun problème ne peut
resister à l’assaut de la pensée soutenue,” “No problem can withstand the
assault of sustained thinking.”
thinking and applying practical knowledge—these are some of the key things that
you, the practitioners and experts, do every day.
The reality is
that, ten years after global financialcrisis, your work on financial sector
supervision and regulation is more important than ever. This work is not only
about preventing the next crisis.
It is also about
fostering healthier financial systems that can channel investment into the most
promising ventures—the start-ups, the firms looking to expand, the high-quality
infrastructure projects—that can boost productivity, incomes, and jobs.
We have been
doing this for some time.
At the IMF, it
all started in the 1960s, when we first provided technical assistance to
central banks. At the BIS, of course, this particular work has an even longer
development accounts for more than a quarter of the IMF’s total budget—about
$267 million in 2017.
substantial commitment, we can help our 189 member countries strengthen their
economic institutions and policies.
tell part of the story, our capacity development work is not just about facts
about people—about meaningful human interactions—from coaching
teams, to gaining insights and skills, to sharing knowledge with partners
around the world.
That is why I
would like to share with you some of the experiences of our so-called
are representative of the incredible commitment and energy that
drives our capacity development—and their stories illustrate how capacity
development works in practice.
Here I would
like to recognize the work of Carmencita Santos.
Over the past 23
years, Carmencita has been working closely with bank supervisors, financial
regulators, parliamentarians, and central bankers—building expertise, learning
from her clients, and spreading best practices across countries.
How did she get
started her career at the Central Bank of the Philippines, where she rose
through the ranks—from bank examiner to senior executive.
Then she decided
to take a risk. After leaving her central bank position, she began a series of
one-year and two-year assignments with the IMF—delivering expert-level training
on financial sector supervision and regulation.
involved being on the ground, working face-to-face with clients, and—over the
years—moving from Guyana to Lesotho, to Tanzania, to Rwanda, to Ghana, and most
recently to Myanmar. What a journey!
professional tours, Carmencita developed what we call the “working team
approach.” It means that clients absorb fresh knowledge so well, that
they themselves can quickly start teaching it to their fellow teammates.
This method can
facilitate the transfer of deep expertise and encourages the building up of
Let me also
introduce you to Leonard Chumo, who will participate in one of our panel
discussions this afternoon.
out as a financial accountant and analyst in his native Kenya. He then worked
as a banking supervisor at the Bermuda Monetary Authority and the Central Bank
of Ireland. He also served as a mission chief for the European Central Bank.
Now he is using
his expertise as an IMF long-term expert based in Nigeria, where he works
closely with the banking supervision experts of the Central Bank of Nigeria.
For example, he
is supporting the implementation of the so-called “Pillar 2” of the Basel
framework. He is coaching teams on how to assess bank capital levels.
He is also providing
training on stress-testing methods, while developing training materials that
are tailored to the specific circumstances of Nigeria’s financial sector.
This is the kind
of work that our long-term experts do every day.
They are in many
ways “the face of the Fund”—because they are teachers, ambassadors, and trusted
I think we all
remember our favorite teachers—I certainly do. Why? Because our teachers open
the doors to great intellectual adventures and because we trust them to point
us in the right direction.
I would like to
take this opportunity to recognize the outstanding contributions of all the
members of our expert network.
at the center of the Fund’s work is good for our member countries and good for
global financial stability.
This brings me
to some of the other dimensions of our capacity development. These include what
I would call “products” and “partnerships”
Development—Products and Partners
dimension is about how we can share knowledge most effectively.
Our goal has
always been to help our members build capacity in a range of areas—from fiscal,
to monetary, to statistical, to financial. Let me give you two financial sector
· In Cambodia, the IMF worked with the government to
create key central bank functions after the country’s civil war. These
multi-year efforts on banking regulation and supervision paved the way for
commercial bank lending that has supported growth and employment.
· In Jamaica, the Fund has recently supported the
country’s Financial Services Commission in strengthening supervision of
insurance and securities firms. By identifying—and addressing—risks in this
area, Jamaica can make its financial system more stable and more supportive of
When we engage
on these and many other cases, we can draw on our global perspective, our
wealth of experiences, to provide high-quality advice and training.
also show that there is no one-size-fits-all. Our goal is to help members meet
the needs they have identified. This can be seen in how we help our
members adapt the global regulatory reforms to their specific circumstances.
And our work
continues to evolve.
One of our key
objectives today is to help our members deal with the challenges and
opportunities of fintech, including virtual currencies and new financial
Yes, we all need
to be extremely vigilant about the risks of financial innovation—think of the
heightened risk of money laundering and the broader financial stability
long-term potential of virtual currencies and their underlying technologies
need to be taken seriously—especially when it comes to regulations.
Of course, in
this new environment, cybersecurity is more critical than ever.
I recently had
the opportunity to participate in an IMF workshop on managing cyber risk—a key
threat to financial stability. Our growing experiences in this area will allow
us to improve our policy advice and capacity development.
And we will—as
always—share our cutting-edge knowledge with our entire membership.
But we are not
doing this alone, which brings me to the partnership dimension.
Last year, more
than 40 member-countries provided funding for our capacity development efforts.
These partners—led by Japan and the European Union—finance about half of our
work in this critical area.
They are doing
this in multiple ways—from sponsoring highly qualified experts, to financing
specific technical assistance programs, to helping fund our global network of
also contribute to our “thematic funds” that support member priorities,
including on financial stability and strengthening financial integrity.
partnership also means working with other organizations to provide the best
possible support to our members.
are a great example—and one where we have an opportunity to further strengthen
our collaboration with the BIS.
The Fund has
made great progress in this area by helping train nearly 10,000 government
officials through free online courses.
At the same
time, our members have long benefited from the incredible online training
expertise of the BIS and its Financial Stability Institute.
That is why we
are now working together to create a new online course on banking
supervision. Some 200 government officials from 41 countries are expected
to participate in this joint course later this year.
We know that we
can often get the best results by combining well-designed online courses with
face-to-face training and assistance.
This is one of
many examples of how capacity development can help empower individuals and
institutions—boosting financial stability and fostering durable and inclusive
Let me conclude
with an old proverb “ Tell me, and I forget. Teach me, and I remember.
Involve me, and I learn. ”
By stepping up
our capacity development efforts and by further deepening our collaboration
with the BIS, we can involve our member countries in a powerful learning
Let us be
teachers, ambassadors, and trusted advisers.
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