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.
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.
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.