Financial sector regulation and supervision

The banking industry has a big impact on countries’ economies such that well-functioning banking systems can promote growth and reduce poverty. Therefore, it is critical for regulatory agencies to control and supervise banks and non-bank financial institutions, ensure transparency in financial markets, protect depositors, and prevent risks to the real economy that may occur through breakdowns in the financial and payments systems.

In recent years, new regulation topics have evolved from the challenges that economies and societies face in the 21st century. Hence we have been supporting central banks and other government agencies to craft national strategies and policies on financial inclusion, gender-equitable access to finance, and measures to mitigate and alleviate climate change.

GOPA AFC offers a wide area of expertise to central banks and regulatory authorities to ensure that the financial sector in developing and transition countries remains stable. We support them in improving or initiating regulation and supervision of the banks, stock markets and insurance companies, capital and pension funds, microfinance, and other financial institutions. Our support is comprised of establishing legal regulation frameworks, off-site and on-site supervision, early warning systems, lending, solvency, and liquidity standards as well as stress testing, among many others.

In Bangladesh, GOPA AFC successfully implemented a World Bank project which aimed to strengthen the supervisory capacity of the Bangladesh Bank. Our experts strengthened Bangladesh Bank banks supervision department that performs in accordance with best practices and international standards. In addition, we offered on-the-job trainings and on- and off-site examination and developed a roadmap to introduce effective risk-based supervision.

In Ghana, the weaknesses in supervision, a lack of coordination and poor institutional linkages, the absence of clear policies and guidelines for the operation of Specialised Deposit Taking Institutions (SDIs) led to the unfortunate proliferation of SDIs. The blatant disregard for ethic management of SDIs are all the consequences of the absence of effective supervision and regulatory measures. GOPA AFC undertook the diagnostic study of the current challenges, lessons learned, and provided recommendations for the strengthening of the sector in order to enhance the regulatory and supervisory framework for SDIs, to promote consolidation and reduce regulatory arbitrage.

GOPA AFC has implemented further projects on financial sector supervision and regulation in Nigeria, Ghana, Uganda, Tunisia, Jordan, Tajikistan, Kyrgyzstan, Ukraine, Vietnam, Thailand, and Lao PDR.