Financial Crime World

Here is the converted article in Markdown format:

Central Bank of Tunisia Unveils Progress on Banking Reforms

Tunis, October 2022 - The Central Bank of Tunisia (CBT) has released a report detailing the progress made on banking reforms in the country. The report highlights key initiatives aimed at strengthening the financial sector and promoting stability.

Anti-Money Laundering Risk Management Framework

The CBT has implemented an Anti-Money Laundering (AML) risk management framework, which includes measures to prevent and detect suspicious transactions.

Liquidity Coverage Ratio and Net Stable Funding Ratio Requirements

Tunisian banks are required to comply with Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (LTD) requirements, introduced in 2014. The LCR aims to ensure that banks maintain sufficient liquidity to meet their short-term financial obligations, while the LTD assesses a bank’s ability to maintain its financial stability over the long term.

Implementation of Basel III Standards

The CBT is actively working on implementing Basel III standards, which include measures to strengthen capital requirements, enhance risk management practices, and improve liquidity supervision. Key areas of focus include:

  • Countercyclical capital buffer: The CBT aims to adopt a countercyclical capital buffer by 2023.
  • Equity definition: The CBT is adopting the Basel III definition of equity for tier 1 and tier 2 capital.
  • Credit risk calculation: The CBT plans to introduce standardized approach for calculating risk-weighted assets (RWAs) for credit risk by 2023.

Other Initiatives

The CBT has also introduced several other initiatives aimed at strengthening the financial sector, including:

  • Adoption of International Financial Reporting Standards (IFRS)
  • Implementation of Internal Ratings-Based (IRB) approach for credit risk
  • Enhanced supervision and reporting requirements

Next Steps

The CBT plans to continue implementing Basel III standards and refining its supervisory framework. The bank aims to finalize the adoption of IFRS by 2023 and complete the overhaul project on capital adequacy and reporting.

Conclusion

The Central Bank of Tunisia’s report highlights the progress made in strengthening the financial sector and promoting stability. The CBT’s efforts aim to enhance risk management practices, improve liquidity supervision, and promote a stable and sustainable banking system.