The Programmatic Development Policy Credit (PDPC) series supports Guyana’s reform efforts to reinforce sound financial sector development and to strengthen fiscal management.
... See More + The proposed operation is the first in a series of two operations. The series builds on three pillars of policy reforms. The first pillar supports the Bank of Guyana’s (BOG’s) ability to manage financial stress including establishing a deposit insurance scheme. The second pillar supports both regulatory reform for the insurance sector as well as domestic and international payment transactions. The third pillar supports stronger fiscal management through a sovereign wealth fund (SWF) for intergenerational savings, better debt management, and improved public investment management. The first credit will be in the amount of SDR 24.4 million (US$35 million equivalent). The PDPC forms part of a developing engagement with the Co-operative Republic of Guyana spanning financial sector, fiscal, and oil and gas sector management. Complemented by the increased financial envelope due to the IDA18 Replenishment, this policy dialogue led to the development of the PDPC series as well as a now planned FY19 Systematic Country Diagnostic (SCD) and Country Partnership Framework (CPF). The first operation in the series supports the Government of the Co-operative Republic of Guyana’s (GCRG’s) strong financial sector reform efforts while recognizing through triggers the GCRG’s efforts to accelerate fiscal reform. The newfound wealth will increase demands on fiscal policy, long-term savings, and domestic investments. Fiscal policy will need to be designed to manage the additional sources of volatility in both economic activity and fiscal revenues. Although natural resource extraction has long been a feature of the Guyanese economy, the increase in discovered wealth raises the question of intergenerational savings and the extent to which revenues from extracted resources should be set aside for future generations. To the extent the wealth is not invested abroad, it must be invested wisely in the Co-operative Republic of Guyana. For the private sector that requires an efficient financial sector that allocates the resources to the most economical investments, and for public investment it requires an efficient public investment management system. The GCRG’s commitment to prudent debt management needs to be supported by a modernization and streamlining of the legislative and institutional framework. With the increase in wealth and progressive market access of the country, The Co-operative Republic of Guyana will need to develop a unified and modernized legal framework for debt management and implement a comprehensive medium-term debt strategy to ensure that borrowing is aligned with macroeconomic policy objectives and undertaken at acceptable levels of risk and cost.
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This issue of Indonesia daily economic update for May 15, 2018 contains economic highlights, including that the government has released the Presidential Decree No. 40/2018 on the renewal of Core Tax System which is planned to be effective in 2021, that the Indonesia Deposit Insurance Corporation (LPS) has decided to maintain its guaranteed interest rates of 5.75 percent for foreign exchange deposits and 8.25 percent for rupiah deposited in microcredit banks, and that exports recorded a 9 percent year-on-year growth while imports grew faster by 35 percent in April, resulting in a USD 1.6 billion trade deficit.
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The period since the global financial crisis of 2008 has been characterized by the emergence of a broad set of tech-driven financial companies ("fintech" companies), acting in parallel with traditional banking services.
... See More + Although the new players are ramping up competition, pushing digital transformation and exerting pressure on the global financial sector, their services appear to be highly complementary to the ones provided by the more established banks, which are also embracing these technologies.
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The development objective of the State-Owned Financial Institutions Strengthening Project for Serbia is to improve the performance of Banka Postanska Stedionica AD Beograd and promote the reform of development finance institutions and other state-owned financial institutions.
... See More + The project comprises of two components. The first component is support the reform of state owned financial institutions. The second component, strengthen institutional capacity will finance technical assistance (TA) and investments in critical areas that are needed to support the achievement of the disbursement linked indicators (DLIs) and disbursement linked results (DLRs).
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The World Bank Financial Sector Advisory Center (FinSAC), established in 2011, is a dedicated technical unit delivering financial sector reform advice and implementation assistance to client countries in the Europe and Central Asia (ECA) region.
... See More + FinSAC is supported financially by Austria’s Federal Ministry of Finance.FinSAC is part of the World Bank’s Finance, Competitiveness, and Innovation (FCI) Global Practice, which identifies the promotion of financial depth and stability in developing countries as one of its three major global mandates for the financial sector, together with financial inclusion and finance for development. Financial sector stability is seen as essential to allow the financial system to fulfill its potential in supporting economic development and is therefore critical in achieving the World Bank’s twin goals of reducing poverty and fostering shared prosperity.FinSAC’s development objective is to support client countries in building more resilient and more stable financial sectors. Financial sector stability has a special resonance for the ECA region, which stands out as the World Bank region worst affected by the global financial crisis. The legacy of the crisis continues to weigh heavily on the economic performance of many of these countries.FinSAC exists to help address these legacy issues and contribute to strong, resilient financial systems. FinSAC is focused on three thematic areas: (i) financial stability, macro prudential frameworks, and crisis preparedness; (ii) microprudential regulatory and supervisory frameworks; and (iii) bank recovery and resolution. It provides implementation-oriented technical assistance; workshops, conferences, and seminars; and conducts relevant and applied research projects, with corresponding outreach activities, on policy, capacity building, and institution building issues in the financial services sector. In 2017, the financial stability outlook for most FinSAC client countries benefitted from a strengthening of economic conditions. There was an acceleration of economic growth, against the backdrop of an upswing in global economic activity. The gathering strength of the euro area recovery benefitted client countries through trade and financial linkages. Improving macroeconomic conditions together with enhanced supervisory efforts contributed to a modest drop in non-performing loan (NPL) exposures in 2017 in most countries, although NPL ratios remain at elevated levels in several FinSAC countries. Demand for FinSAC’s support remained strong in 2017, particularly for technical assistance. The range of projects covered the full thematic spectrum of FinSAC’s area of expertise, but with important differences in the type of engagement across countries. Key themes in 2017 included continued awareness raising of cybersecurity issues, enhancing resolution and recovery frameworks for failing financial institutions, the establishment of robust deposit insurance frameworks, and tackling high levels of non-performingloan (NPLs).
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The main public policy objectives of a deposit insurer are to reimburse depositors after bankfailure and to contribute to the stability of a financial system.
... See More + To achieve these objectivesand to build public confidence in a deposit insurance system, deposit insurers musthave operational readiness to be able to act quickly after a bank failure. Sound fundingarrangements are essential aspects of such readiness, as they ensure prompt reimbursementof insured depositors and sufficient funds for the deposit insurer to unwind the institution.Depositor confidence depends, in part, on knowing that adequate funds for depositinsurance would always be available to ensure the prompt reimbursement of their claims. Itis therefore considered a best practice to build credible ex-ante funding mechanisms whichhave the financial capacity to ensure that these obligations are met.
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Ratings for the Financial Sector Strengthening and Market Infrastructure Project (Formerly Titled Financial Sector Technical Assistance Project) for Kosovo were as follows: outcomes were moderately satisfactory, the risk to development outcome was moderate, the Bank performance was moderately satisfactory, and the Borrower performance was also satisfactory.
... See More + Some lessons learned included: a number of lessons can be drawn from the project design and implementation that would be useful for the Bank and other donors for the design of financial sector operations, other projects in the country, as well as with broader application.It is important to fully assess all required actions during th preparation stage of a project and identify and assess the implementing agency’s internal capacity to execute or manage all required functions. The project experienced delays largely due to the procurement process, which proved to be challenging in the early stage as the PMT team lacked the experience with WB projects and took time to become familiar with requirements and standards.The scale and scope, as well as the timeline of a project should be well aligned with the implementing agency’s capacity for coordination, procurement, contract management, and financial management. Coming up with arrangements to address this particular bottleneck early in the project cycle is an important lesson. Establishing a dedicated PIU (see below) is an important consideration.These are particularly relevant for a fragile and post-conflict environment given the capacity constraints and institutional uncertainties. Civil servants working part-time in project implementation, are not only constrained in terms of time but they also often find themselves challenged by institutional and political uncertainties of the post conflict environment.The financial sector projects should try to select and deliver those types of activities that are most important for the regulator or the financial sector, and for which the Finance and Markets GP at the bank can add most value.Selecting activities which are closer to the core expertise of the relevant WB unit, would add most value to the client and ensure satisfactory outcomes and efficient implementation of the project.Another important lesson from the project was related to the importance of the quality of supervision. Despite the aforementioned shortcomings in the quality of entry and project design, the project managed to successfully achieve its results thanks to the satisfactory level of quality of supervision along with the strong borrower ownership and commitment.
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Implementation Completion and Results Report ICR4157 JUN 16, 2017
The FIRST Lessons Learned Series is a collection of FIRST's technical and functional insights gained from FIRST funded engagements. This knowledge note shares valuable lessons from FIRST-funded DIS projects led by the Finance and Markets Global Practice at the World Bank.
... See More + The paper addresses some of the most important lessons learned and some of the key challenges faced in building effective deposit insurance systems (DIS) in developing countries.
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