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Central Bank on Risk-Based Supervision
Wednesday, January 30, 2008
The Central Bank of The Gambia, in line with international best practices, is said to be on the verge of putting the finishing touches to the introduction of a risk-based supervision. The supervision will operate on a pilot basis in 2008. This, when developed, will emphasise a thorough understanding of the supervised entity’s risk profile and thus map out the challenges faced in carrying out the assessment and determining the level of risk. This has been a major challenge faced by regulators in the sub-region in the past. Risk-based supervision, according to Mr. Bamba Saho, Governor of Central Bank of The Gambia, is about the targeting of resources on the richest institutions with a view to achieving a more effective and efficient supervision. Mr. Saho’s comments came from a statement read on his behalf by Mr. Basiru Njie, first Deputy Governor of the Central Bank of The Gambia, at the opening of a week-long seminar on risk-based supervision. “Like price stability, financial stability - a situation where the financial system is both operating efficiently and able to withstand large economic and financial shocks - are important prerequisites for sustained non-inflationary growth,” he said. The maintenance of financial stability, he went on, is an important concern to the Central Bank of The Gambia and supervisory authorities worldwide. The Central Bank Governor underscored the ongoing challenges as part of the rapid innovation and continuous structural evolution which, he says, characterises financial systems. “Relatively recent changes have included the development of a wide array of new financial instruments and a growth in the number of new cross-sectoral financial participants, many of whom have a global reach,” Governor Saho said. He added that such developments have resulted in an increase in the number of potential channels through which economic and financial shocks can be created and transmitted. Author: By Baboucarr Senghore
Source: The Point
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