Technical Assistance Reports

Seychelles: Technical Assistance Report-Macroprudential Stress Testing and Climate Risk Analysis

January 17, 2025

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Format: Chicago

International Monetary Fund. Monetary and Capital Markets Department "Seychelles: Technical Assistance Report-Macroprudential Stress Testing and Climate Risk Analysis", Technical Assistance Reports 2025, 005 (2025), accessed March 30, 2025, https://doi.org/10.5089/9798400297861.019

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Summary

The Technical Assistance (TA) mission, conducted in Victoria, Seychelles, from May 2 to 17, 2023, assisted authorities with macroprudential stress testing and climate risk analysis. The stress testing focused on strengthening the solvency and liquidity frameworks: (i) for solvency, considering credit and foreign exchange risks to design robust scenarios, applying econometric techniques to enhance their risk assessment, and (ii) for the liquidity stress test, enhancing the cash flow analyses utilized by the authorities. For the climate risk analysis framework, the mission reviewed essential components, identified data sources, and provided hands-on training for climate risk assessment. Recommendations include fostering collaboration within CBB and other agencies, better leveraging available data, and improving data collection for stress testing and climate risk analysis. The CBS is expected to advance its framework and address data challenges to implement stress testing and climate risk analysis initiatives effectively.

Subject: Credit risk, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Loans, Nonperforming loans, Stress testing

Keywords: Climate change, Climate risk analysis diagnosis, Climate scenario analysis, Credit risk, Department mission, Environment, Financial sector policy and analysis, Global, IMF stress, IMF's Monetary, Liquidity stress testing, Loans, Macroprudential stress testing, Mission Climate risk analysis component, Natural disasters, Nonperforming loans, Solvency stress testing' Seychelles., Stress testing

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