Dhaka, Bangladesh – Bangladesh is going to form a Financial Stability Council (FSC) aiming to deal with possible financial shocks properly.
The government has taken the latest move in line with a recommendation made by the World Bank Group in their mission report on Bangladesh contingency-planning project in March 2011.
The International Monetary Fund (IMF) also made such recommendation while Bangladesh was taking extended credit facility (ECF), according to officials.
The first meeting of the proposed apex body comprising all financial-sector regulators of Bangladesh was held at the ministry of finance in the capital Dhaka on Thursday with Finance Minister AMA Muhith in the chair.
SK Sur Chowdhury, Deputy Governor of the Bangladesh Bank (BB), the country’s central bank, presented a concept paper of the proposed FSC at the meeting, they added.
“We’re going to form the apex body aiming to manage any possible financial shocks with systemic way,” a senior official said, adding that different countries, including the United States, the United Kingdom, India and Singapore, have already constituted similar bodies to get advice on how to deal with financial shocks.
The major roles of FSC will be assisting systemic troubled banks and financial institutions (FIs), management of systemic stability, improvement of resolution regime for financial institutions; and designation of macro-prudential regulations and instruments, the official explained.
The proposed FSC will be chaired by the finance minister of Bangladesh. Senior secretaries of ministry of finance and head of all financial regulators would be the members of the Council.
Member secretary will be the deputy governor of the central bank of Bangladesh in charge of Financial Stability Department.