Papua New Guinea: Financial System Stability Assessment

IMF Staff Country Reports, July 5, 2011

Source details

Papua New Guinea (PNG) was only mildly impacted on the financial front during the global crisis.
The financial sector in PNG has been a source of strength in 2000, but vulnerabilities exist and need to be carefully managed.
The development of local government securities markets is important for system stability.
Five years after the enactment of the Proceeds of Crime Act (POCA), there is still no legislation on terrorist financing.

Regulation and supervision:
- Important steps are needed to strengthen the regulation and supervision of the banking sector.
- Important steps are needed to strengthen the regulation and supervision of the insurance sector.
Market infrastructure:
- Development of local government securities markets is highlighted as important for system stability.
Legal and compliance framework:
- Despite enactment of the Proceeds of Crime Act (POCA), there is an absence of legislation on terrorist financing five years after POCA.

Strengthen regulatory frameworks and supervisory capacity for:
- Banking sector oversight.
- Insurance sector oversight.
Promote development of local government securities markets to enhance financial-system stability.
Adopt legislation addressing terrorist financing to complement the Proceeds of Crime Act (POCA).

Papua New Guinea: Financial System Stability Assessment — July 5, 2011