Burundi: Technical Assistance Report-Financial Sector Stability Review
Technical Assistance Reports, March 19, 2025
Source details
- Canonical URL
- Burundi: Technical Assistance Report-Financial Sector Stability Review
Other formats
Bibliographic details
- Published: March 19, 2025
- Series: Technical Assistance Reports
- DOI: https://doi.org/10.5089/9798229004213.019
Summary of the engagement
- Mission and timing:
- The Monetary and Capital Markets Department (MCM) of the International Monetary Fund (IMF) carried out a Financial Sector Stability Review (FSSR) mission from January 31 through February 13, 2024.
- The FSSR responded to a request from the Bank of the Republic of Burundi (BRB).
- Objectives:
- Performed a diagnostic assessment of the financial system oversight framework.
- Reviewed progress in implementing technical assistance (TA) recommendations of 2019–2024.
- Developed a draft Technical Assistance Roadmap (TARM) to improve financial system stability by strengthening the BRB’s capacity.
- Expected outcome:
- Implementing the report’s recommendations will bolster financial stability and support economic growth.
Main macro-financial vulnerabilities identified
- Difficulty of assessing credit quality:
- Linked to the boom in lending in 2021–2022.
- Worsened by non-adherence to the International Financial Reporting Standard 9 (IFRS9) and to the rules on credit risk from the Basel Committee on Banking Supervision (BCBS).
- Exchange rate risk:
- Risk related to exchange rate depreciation.
- Sovereign-banks nexus:
- Risks arising from interactions between public finances and the banking sector.
- Concentration risks:
- Concentration of assets (large exposures) and liabilities (deposits) noted.
- Recommendation that prudential rules and regulations should be more rigorously applied and that concentration should be given greater consideration in supervision and stress tests.
Key recommendations and supervisory priorities
- Strengthen the BRB’s supervisory capacity before enhancing prudential regulations.
- Address systemic risks through:
- Improved stress testing.
- A strengthened crisis management framework.
- Give greater consideration to asset and liability concentration in:
- Supervision.
- Stress testing exercises.
- Implement the draft Technical Assistance Roadmap (TARM) to strengthen BRB capacity and improve financial system stability.
Content in this bundle
- tarea2025029-print-pdf