By Maimuna Sey-Jawo
A five-day regional course on Financial Soundness Indicators (FSIs) began yesterday at a local hotel in Koloi.
It is being organised by the West African Institute for Financial and Economic Management (Waifem) in collaboration with the International Monetary Fund (IMF). It is being hosted by the Central Bank of the Gambia.
The objective is to compile FSIs in accordance with the methodology of the FSI guide, using a data from sectoral financial statements and supervisory report forms.
FSIs are measures that indicate the current financial health and soundness of a country’s financial institutions, and their corporate and household counterparts.
Paul Mendy, Waifem’s financial sector director, said today’s open and globalised financial economy, characterised by a high degree of interconnectedness among financial institutions has heightened the vulnerability of financial systems.
“The fragile financial systems of the West Africa sub-region have not been left out these vulnerabilities,” the Waifem man said.
“This situation has necessitated improved compilation, aggregation, analysis and interpretation of financial data to adequately inform policy and ensure soundness of the financial system,” he added.
A team of experts and practitioners from the IMFs statistics department will conduct a course on these trends during the five-day confab.
“Lectures will be complemented by hands-on exercises, where participants will be tasked to resolve practical questions of classification of financial institution units, construction of reporting of populations for FSIs among others,” he stated.
First deputy governor of the Central Bank of the Gambia, Dr Seeku Jaabi, said the ability to monitor financial soundness presupposes the existence of indicators that can be used as a basis for analysing the current health and stability of financial system.
These macro prudential indicators comprise both aggregated indicators of the health of individual financial institutions, and macroeconomic variables associated with FSIs, he stated.
“The operation of a financial system is dependent on overall economic activity,” Jaabi said.
Jaabi expressed hope that the forum will provide the platform for the exchanging of ideas which will bring about safer financial systems.
Khay Phousnith, a representative from IMF, also spoke at length on the importance of the forum, urging participants to make the best use of it.