Press Release No. 13/467

Press Release: East African Central Bank Supervisors and Financial Stability Officials Share Experiences on the Implementation of Basel Frameworks

November 22, 2013

The International Monetary Fund (IMF)’s East African Regional Technical Assistance Center (East AFRITAC) held a regional workshop on the implementation of the Basel II and III frameworks in Kigali, Rwanda, on November 18-22, 2013, to discuss practical issues and challenges in the implementation process of the Basel II and III frameworks. Twenty-nine officials from central banks’ supervisory and financial stability departments, representing eight countries (Burundi, Ethiopia, Kenya, Malawi, Rwanda, South-Sudan, Tanzania and Uganda) participated.

In her opening remarks, the Deputy Governor of the National Bank of Rwanda, Dr. Monique Nsanzabaganwa, emphasized the importance of safe and sound banking systems. She also highlighted the role the Basel II and III frameworks could play in further enhancing the risk management practices of banks.

During the discussions, participants focused on practical issues and challenges in the implementation process of the Basel II and III frameworks. Presenters from the IMF’s Monetary and Capital Markets Department, East AFRITAC and an expert from the Dutch Central Bank explained the details of these frameworks. They also advised on selecting elements of the frameworks relevant for the region and taking a phased approach instead of aiming to implement the frameworks as a single package. In addition, two presenters from the National Bank of Georgia shared their experience, providing a perspective from an emerging country outside the region that has been implementing the frameworks. Several participating countries made presentations on their roadmap and status of implementation, as well as the challenges they face. These discussions drew attention to key issues which included overcoming capacity weaknesses, availability and quality of commercial banks’ Management Information Systems, data quality constraints, the time needed to pass amendments to laws and regulations, and the need to create support from all relevant stakeholders. Further work and time is required to build the capacity among supervisors and bankers to implement the Basel II and III frameworks.

Participants agreed that increased information sharing between the project teams of the different central banks in the region working on implementation of Basel II/III, would be beneficial for all parties involved. It would facilitate the countries which are at the initial stages of the implementation process, as it would allow them to build on lessons learned from countries which have already made more progress. In addition, it would also contribute to further convergence of prudential frameworks in the region.

Mr. Sukhwinder Singh, Coordinator of East AFRITAC, reaffirmed that the IMF will continue its support for countries in the implementation and transition towards the Basel II and III frameworks through its technical assistance, training and attachment programs.