Nairobi, Tuesday, November 13, 2018: Over the past three weeks, COMESA Monetary Institute has carried out three capacity building initiatives to equip staff of Central Banks in several COMESA Member States with skills on various aspects of financial management.
The activities included: Training on “Domestication of Basel III with Particular Emphasis on Post Crisis Regulatory Framework” for COMESA Central Banks from 22 - 26 October 2018 and workshop on the manual on “Macro and Micro Stress Testing”, (29 October – 1st November 2018.
The third event was the validation workshop on Estimating and Forecasting Time Varying Volatility in Consumer Prices: and, Risk Taking Channel of Monetary Policy Transmission Mechanism (5 - 7 November 2018).
The workshops were conducted in Kenya and drew participants from Burundi, Djibouti, DR Congo, Egypt, Eswatini, Kenya, Malawi, Mauritius, Rwanda, Sudan, Uganda, Zambia and Zimbabwe.
Basel III standards
Training on domestication of Basel III was to equip participants with knowledge on the prescribed standards and principles, and how these can be domesticated, taking into account the individual country’s current economic and financial sector conditions.
Basel III standards are intended to ensure stability in the financial sector by among others: Raising the quality of capital to ensure banks are better able to absorb losses and increasing the risk coverage of the capital framework among others.
The workshop on the manual was aimed at equipping the users with practical understanding of Macro and Micro stress testing tools. The manual will be published by CMI as a knowledge product to provide Member States’ Central Banks with a practical guide on the different methodologies and techniques currently used for macro and micro stress testing, and advices on some of the best practices to follow in applying these techniques.
The third workshop was necessitated by the need to understand the causes of price volatility and to forecast volatility, to achieve optimal resource allocations. This would ultimately enhance effectiveness of monetary policy and to improve the overall performance of an economy.
“Achieving this requires robust forecasts to guide policy formulation by COMESA member Central Banks most of which are now intending to gradually shift from monetary targeting to inflation targeting,” the Director of the CMI Mr Ibrahim Zeidy said.