The Bank of Sierra Leone is facilitating a seminar on risk-based supervision at the bank Complex in Freetown.
All the Commercial banks in the country are currently participating in the seminar which started yesterday and will continue on to April 10.
The Deputy Governor of the Bank of Sierra Leone in his keynote address during the opening ceremony of seminar said that the primary goal of banking supervision is the promotion of a stable, safe and sound banking system, which is a critical condition for financial markets stability and sustainable growth.
He maintained “the rapid pace of technological change, deregulation, globalization, economic regionalism, and the development of complex financial instruments have warranted a paradigm shift in approaches to banking supervision.”
The Deputy Bank governor averred that as a consequence, modern banking supervision has become increasingly concerned with risk management as a major vehicle to achieve supervisory goals.
Alhaji M.S Fofanah said that the objectives of the seminar is to enhance the various bank’s appreciation and understanding of the mechanics of risk-focused banking supervision; to enable them to relate the core principles of effective modern banking supervision to the current supervisory environment; and to provide opportunities for participants to develop skills in risk-focused supervision.
The bankers will also wholesomely look at the Basel Accord 1& II which was introduced by the Basel Committee on banking supervision in 1988.
This framework is a recommendation on banking laws and regulations, which primarily focus on credit risk and prescription of a set of minimal capital requirements for banks.
The Bank Governor stated that in order to meet the challenges of the Basel Accords, banks have put in place risk management principles that influence their daily credit allocation decisions.
He pointed out also that the new supervisory regime encourages improvements in bank-systems for managing quantifiable risks and it emphasizes that banks take full responsibility for understanding and managing their risk.
He underlined that there is great importance for capacity building in the vital area of risk management in order to develop sound internal models for risk evaluation for maintenance of adequate levels of capital.
To help train the various bankers on risk based supervision, are two facilitators from the Office of the Superintendent of Financial Institutions in Canada.