Sri Lanka: Technical Assistance Report-Central Bank Risk Management

Technical Assistance Reports, October 4, 2024

Source details

Canonical URL

Sri Lanka: Technical Assistance Report-Central Bank Risk Management

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Published: October 4, 2024
• Series: Technical Assistance Reports
• DOI: https://doi.org/10.5089/9798400289934.019

Summary / Key findings

• Since 2015, the Central Bank of Sri Lanka (CBSL) has enhanced its risk management through a comprehensive framework and is aiming for an Enterprise Risk Management system.
• Establishment of the Banking Risk Oversight Committee (BROC) and the Non-Financial Risk Management Committee (NFRMC) has fostered higher-level risk discussions.
• CBSL is focusing on:
  • strengthening leadership's engagement in risk management;
  • adopting a risk appetite statement;
  • ensuring targeted training;
  • empowering the risk management function;
  • implementing the 3 Lines Model for clear role delineation;
  • defining risk tolerance levels with Key Risk Indicators (KRIs).

High-level objectives of IMF engagement

• Embed robust risk management practices deeply within the organization.
• Align the CBSL’s strategic goals with its risk management efforts.
• Enhance decision-making processes to improve efficiency and effectiveness.
• Ensure all risk management improvements are in line with the CBSL's legal mandate.

Implementation priorities and reforms

• Institutionalize Enterprise Risk Management across CBSL operations.
• Strengthen governance by increasing leadership engagement and clarifying roles via the 3 Lines Model.
• Develop and adopt a formal risk appetite statement and defined risk tolerance levels.
• Define, monitor, and report Key Risk Indicators (KRIs) to signal emerging risks and track risk tolerance breaches.
• Provide targeted training to build risk-awareness and capability across relevant units.
• Empower the dedicated risk management function to operate with mandate, independence, and resources consistent with its role.

Subject tags and keywords (as listed)

• Cyber risk
• Financial regulation and supervision
• Operational risk
• Technology
• CBSL department
• Cyber risk
• deputy governor
• IMF executive director
• IMF HQ
• Maghreb
• MCM Department
• Operational risk

Content in this bundle

• tarea2024083-print-pdf - Preface
  • tarea2024083-print-pdf - Preface (Markdown version)
  • tarea2024083-print-pdf - Preface (PDF)