Solomon Islands’ Financial Institution Risk Management Under Scrutiny

In August-September 2021, a Monetary and Capital Markets Department mission was dispatched to the Central Bank of Solomon Islands (CBSI) in response to a request from CBSI. The mission aimed to provide technical assistance on central bank risk management and help CBSI establish an Enterprise Risk Management (ERM) framework.

Mission Objectives

The mission, led by Paul Woods of the Central Bank of Ireland and Chris Aylmer, formerly with the Reserve Bank of Australia, under the supervision of Ashraf Khan from MCM’s Central Bank Operations Division, had two key objectives:

• Strengthening Risk Culture: To promote a risk-aware culture throughout the organization
• Enhancing Risk Governance: To improve the role of CBSI’s risk management unit and overall risk governance

Goal

The goal was to equip CBSI with the necessary tools and knowledge to effectively manage risks and maintain financial stability in the Solomon Islands.

Progress and Best Practices

This report provides an update on the progress made by CBSI in implementing the ERM framework and highlights best practices in central bank risk management. The initiative aims to contribute to the development of a robust financial system in the Solomon Islands, reducing the likelihood of systemic risk and ensuring the country’s economic stability.

Conclusion

The successful implementation of an ERM framework is essential for maintaining financial stability in the Solomon Islands. The mission’s technical assistance has laid the groundwork for CBSI to strengthen its risk culture and governance, enabling the bank to better manage risks and maintain a stable financial system.