Zimbabwe: FSSR Follow Up Technical Assistance—Implementation of the Basel II/III Capital Framework
High-Level Summary Technical Assistance Reports, October 17, 2023
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- Zimbabwe: FSSR Follow Up Technical Assistance—Implementation of the Basel II/III Capital Framework
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Bibliographic details
- Authors: Paula Cristina Seixas de Oliveira, João Luis Resende
- Published: October 17, 2023
- Series: High-Level Summary Technical Assistance Reports
- DOI: https://doi.org/10.5089/9798400256028.029
Background and objective
- Financial Sector Stability Review (FSSR) conducted in November 2018 identified areas requiring improvement and technical assistance in Zimbabwe’s regulatory and supervisory frameworks, including the need to strengthen the capital framework for the banking sector.
- With IMF support, the Reserve Bank of Zimbabwe (RBZ) is planning to implement Basel III capital standards, considering Zimbabwe’s specific circumstances and applying proportionality.
- The High-Level Summary Technical Assistance Report documents a mission that reviewed Zimbabwe’s capital framework (laws and regulations), identified areas for updating capital requirements, and discussed these with RBZ management.
Mission review and focus
- The mission reviewed:
- Existing laws and regulations comprising Zimbabwe’s capital framework.
- Areas needing updates to capital requirements.
- The mission’s alignment focus:
- Recommendations primarily aligned with the Basel III capital framework.
- Particular emphasis on standardized approaches.
Key findings
- Identified the need to strengthen the capital framework for the banking sector as part of FSSR follow-up.
- Specific areas for updating capital requirements were identified through the mission’s review of laws and regulations.
- The mission highlighted concrete steps that should be considered in drafting new regulations (details of those concrete steps are summarized in the report).
Policy recommendations and next steps
- Recommendations made for drafting amendments that align primarily with the Basel III capital framework, with proportionality for Zimbabwe’s circumstances.
- Emphasis on standardized approaches within the Basel III framework as a priority in drafting regulations.
- RBZ committed to draft the regulations’ package for review.
- The drafted regulations will be reviewed during the next technical assistance mission.
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- Zimbabwe: FSSR Follow Up Technical Assistance—Implementation of the Basel II/III Capital Framework