Banking Regulation Updates in Myanmar Take Shape Amid IMF Guidance
Yangon, Myanmar - The International Monetary Fund’s (IMF) Monetary and Capital Markets Department has been working closely with the Central Bank of Myanmar (CBM) to develop a more risk-based approach to banking supervision in the country. This effort aims to enhance financial stability and promote economic growth.
Background
In 2018 and early 2019, the IMF conducted a series of missions at the request of the CBM to support the development of bank regulation and supervision in Myanmar. The goal was to help the CBM transition from a rules-based approach to a more risk-focused approach.
Guide to Risk-Based Supervision
The outcome of this initiative is the Guide to Risk-Based Supervision, which outlines approaches to risk assessment and mitigation based on international best practices. According to the guide, key risks identified in the Myanmar context include:
- Legal, regulatory, and reputational risk
- Strategic risk
- Group and related parties’ risk
- Credit risk
- Market risk
- Operational risk
- Liquidity risk
Implementation
The Central Bank of Myanmar is committed to implementing this new approach over the period until 2020. Despite the challenges ahead, the bank has already started undertaking risk assessments using a new risk matrix tool as examinations come due.
Impact
The IMF’s involvement in Myanmar’s banking regulation updates marks an important step towards enhancing financial stability and promoting economic growth in the country. As the CBM continues to implement this new approach, it is expected to have a positive impact on the country’s financial sector, ultimately benefiting consumers and businesses alike.
By adopting a more risk-based approach, the Central Bank of Myanmar can better identify and mitigate potential risks, which will lead to greater stability and confidence in the financial system. This, in turn, will support economic growth and development in the country.