Countries in the eastern Africa region have benefited from an International Monetary Fund (IMF)-training on how to test for possible risks that could have adverse impacts on their economies.
The micro prudential stress testing workshop was aimed at enabling the countries to assess the inter-linkages between institutions and sectors, facilitate the identification of potential vulnerabilities and the build up of risks across sectors in the wake of the global financial crisis.
Specific areas covered included stress testing and sensitivity analysis for credit risk, interest rate risk, foreign exchange risk, liquidity risk and testing for possible spillover effects through interbank contagion.
The workshop, which was held in Addis Ababa, Ethiopia, was conducted by the IMF Africa Regional Technical Assistance Center for Eastern Africa—East AFRITAC (AFE) and The Macroeconomic and Financial Management Institute for Eastern and Southern Africa (MEFMI).
It was attended by participants from the bank supervision and financial stability units of central banks of Burundi, Ethiopia, Kenya, Mozambique, Namibia, Swaziland, Tanzania, Uganda, and Zambia.
The workshop was prompted by the growing attention on stress testing since the global financial crisis and the resulting regional initiatives to implement comprehensive stress testing frameworks that are customized to local and regional circumstances.
International and regional experts facilitated the session built around the Cihak framework developed by the IMF, which is being adopted and implemented, sometimes in a modified form, by the central banks in the region.
International Monetary Fund (IMF)