Financial Crime World

Tajikistan Establishes National Financial Stability Council to Mitigate Risk

Introduction

In a move aimed at preventing and mitigating the impact of potential risks and global financial crises on the national economy, the World Bank has provided technical assistance to establish the National Financial Stability Council in Tajikistan.

Background

The Council was established by Resolution No. 331 of the Government of the Republic of Tajikistan dated June 21, 2018. It is a continuing interagency advisory body tasked with reviewing matters related to maintaining financial stability and identifying systemic risks in the financial system.

Composition

The Council consists of high-ranking officials from various ministries and institutions, including:

  • Minister of Economic Development and Trade as Chairman
  • Chairman of the National Bank of Tajikistan as Coordination Secretary
  • Minister of Finance as Deputy Chairman
  • Individual Deposit Insurance Fund
  • Executive Office of the President of the Republic of Tajikistan

Objectives

The Council’s key objectives are to:

  • Develop methods for effective assessment of various forms of state financial support and submit reports to the Government before decisions are made
  • Analyze potential risks and impact of future threats on financial stability, develop proposals for restoring stability, and promote coordination among its members
  • Regularly assess financial stability
  • Coordinate macro- and micro-prudential policies to eliminate vulnerabilities
  • Identify and evaluate available risks
  • Develop emergency plans in crisis situations
  • Improve regional and international cooperation
  • Study best practices in financial sector regulation and supervision

Crisis Situation Response Plan

In the event of a crisis situation or unforeseen destabilizing events, including natural disasters, the Council will develop an emergency plan aimed at:

  • Prevention
  • Elimination
  • Management
  • Resolution

Members of the Council will review key issues related to their mandate, including:

  • Assessing financial institutions
  • Distributing risks throughout the financial system
  • Developing stress-testing procedures
  • Identifying liquidators and official administrators

Conclusion

The establishment of the National Financial Stability Council demonstrates Tajikistan’s commitment to ensuring the stability of its financial system and mitigating potential risks.