Thirty-two analysts from 11 Central Banks of COMESA Member States have been trained on “Macro and Micro Stress Testing as a tool for assessing the stability of the financial system. The tool helps uncover direct exposures between banks that can lead to contagion through domino effect and cause instability in the entire financial system.

Conducted by the COMESA Monetary Institute (CMI), the training is part of efforts to expose participants to stress testing tools and enhance the implementation of the COMESA Financial System Development and Stability Plan.

CMI Director Dr Lucas Njoroge noted that macro and micro stress testing are key tools for assessing the stability of the financial system and motivated the need for the training.

Dr Njoroge made this observation in Cairo, Egypt during the opening session of the training on 22 June.

Speaking at the same event, Dr. Naglaa Nozahie, Governor’s Advisor for African Affairs at the Central Bank of Egypt underscored the importance of systemic risk assessment as it is pertinent in uncovering direct exposures between banks.

Participants were also taken through the regulatory framework for stress testing for the Egyptian banking sector and learned about supervisory assessment methods for banks’ stress testing frameworks through both offsite supervision and onsite examination approaches.

At the end of the workshop, the analysts from DR Congo, Egypt, Eswatini, Kenya, Libya, Malawi, Tunisia, Sudan, Uganda, Zambia and Zimbabwe attested to gaining a deeper understanding of macro and micro stress testing, including how to incorporate scenarios around climate change risk, liquidity stress tests and contagion risks.