Financial Sector Surveillance

Source details

Educational/professional background:
- Degree in economics or finance, preferably at the master's level, or equivalent work experience.
- Good quantitative skills.
- Proficiency in the use of computers to analyze data.
Recommended prior training:
- It is strongly recommended that applicants complete the online Financial Market Analysis (FMAx) course before enrolling.
Technical skills:
- Familiarity with the basics of Excel is important because many of the workshops use Excel worksheets.

Purpose:
- Introduces participants to key concepts and tools used in the identification and assessment of financial sector vulnerabilities and sources of strength.
Toolkit and focus:
- Provides a basic toolkit to assess financial sector risks and to measure them against existing capital and liquidity buffers in the financial system.
- Focuses on early identification of unwarranted macro-financial imbalances and analysis of the transmission of financial distress across institutions, markets, and economic sectors.
- Objective is reducing the likelihood and the severity of financial crises.
Delivery methods:
- Combination of lectures and hands-on workshops that allow participants to apply essential risk assessment techniques.

Measure the main risks facing banks (e.g., credit, market, funding) and use bank balance sheet indicators of financial soundness (e.g., asset quality, liquidity and capital buffers), such as IMF Financial Soundness Indicators, in assessing banking system risks.
Design and perform basic stress tests of solvency and liquidity and interpret the results.
Recognize the importance of nonbank financial intermediaries and their links to banks.
Assess macrofinancial linkages (e.g., the impact of business cycles on bank soundness), including the links between the financial sector, the government, and the real economy.
Track the buildup of systemic risk and vulnerabilities associated with credit, real estate prices, leverage, balance sheet mismatches, and interconnectedness.
Assess how shocks can amplify throughout the financial system, e.g., through adverse liquidity spirals a new approach to financial regulation since the global financial crisis.