Financial Sector Surveillance

Source details

Training Program: Financial Sector Surveillance
Target Audience: Junior to senior government officials tasked with surveillance of the financial sector, especially staff of the central bank, financial regulators, and other agencies that engage in macroprudential oversight.

Expected background: degree in economics or finance, preferably at the master’s level, or equivalent work experience.
Skills: good quantitative skills; proficiency in the use of computers to analyze data.
Recommendations: It is strongly recommended that applicants have completed the online Financial Market Analysis (FMAx) course.
Technical tools: Because many of the workshops use Microsoft Excel worksheets, familiarity with the basics of Excel is important.

Presented by the Institute for Capacity Development.
Introduces key concepts and tools used in the identification and assessment of financial sector vulnerabilities and sources of strength.
Provides a basic toolkit to assess financial sector risks and measure them against existing capital and liquidity buffers in the financial system.
Focuses on early identification of unwarranted macro-financial imbalances and analysis of transmission of financial distress across institutions, markets, and economic sectors.
Objective: reducing the likelihood and the severity of financial crises.
Format: combination of lectures and hands-on workshops allowing participants to apply essential risk assessment techniques.

Measure the main risks facing banks (e.g., credit, market, funding) and their respective capital and liquidity buffers, from a systemic financial stability perspective.
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 macro-financial linkages, including the links between the financial sector, the government, and the real economy, along with potential amplification mechanisms.
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 or feedback effects between asset prices and leverage.