Myanmar Takes Steps to Improve Banking Regulations and Compliance

Strengthening Bank Regulation and Supervision

In response to a request from Myanmar’s Central Bank (CBM), the International Monetary Fund (IMF) conducted a series of missions in Yangon in 2018 and early 2019 aimed at supporting the development of bank regulation and supervision. The IMF’s Monetary and Capital Markets Department worked closely with the CBM to introduce a more risk-based approach to supervision, setting out approaches to risk assessment and mitigation based on international best practices.

Identifying Key Risks

According to the Guide to Risk-Based Supervision, key risks identified in the Myanmar context include:

• Legal, regulatory and reputational risk
• Strategic risk and group and related parties’ risk
• Credit, market, operational, and liquidity risks

Implementing a New Approach

The CBM is committed to implementing this new approach by 2020 and has already begun conducting risk assessments using a new risk matrix tool during examinations.

Enhancing Supervisory Framework

The move towards a more comprehensive risk-based approach is seen as crucial in improving banking regulations and compliance in Myanmar, which is expected to take years to perfect. Despite the challenges ahead, the CBM remains committed to implementing this new approach and enhancing its supervisory framework to ensure the stability and soundness of the country’s financial system.

IMF Support

The IMF’s support has been instrumental in helping the CBM to develop a more effective risk-based approach to supervision, which is critical for maintaining public confidence in the banking sector. The development of these regulations and guidelines is expected to have far-reaching implications for the country’s financial institutions and stakeholders alike.