Financial Stability Council to deal with crisis in financial sector
Finance minister takes the decision responding to a
proposal from Bangladesh Bank
UNB
The Finance Ministry yesterday decided to form a Financial Stability Council (FSC) to deal with crises in the financial sector including banks and financial institutions (FIs), reports UNB.
The meeting, with Finance Minister AMA Muhith in the chair, took the decision responding to a proposal from Bangladesh Bank.
Bangladesh Bank deputy governor SK Sur Chowdhury presented a concept paper on the formation of the FSC as a framework of a crisis resolution authority, said a central bank press release.
The new FSC would include representatives of all the financial sector regulators like Ministry of Finance, Bangladesh Bank, Bangladesh Security and Exchange Commission (BSEC), Microcredit Regulatory Authority (MRA) and, Insurance Development and Regulatory Authority (IDRA) and also relevant government agencies such as National Board of Revenue (NBR).
In the meeting, a preliminary organisational structure of FSC has been proposed. Under this umbrella, two working groups, (1) Resolution Regime for Banks/FIs and (2) Macro-financial Monitoring have been proposed along with the Coordination Council (CC), a forum of regulators headed by Governor of Bangladesh Bank.
The frameworks and terms of references of proposed FSC and two working groups have been extensively discussed and will be finalised by the Government after critical review and feedback from participating regulators and think-tanks including international best practices, said the Bangladesh Bank.
A technical group named Coordination Council Technical Group (CCTG) has already been formed to provide technical support to CC.
The proposed FSC will be chaired by honorable Finance Minister. Senior Secretaries of Ministry of Finance and heads of all financial regulators would be the members of the proposed Council.
Member secretary would be the Deputy Governor of Bangladesh Bank in charge of Financial Stability Department.
The Secretariat of FSC will be located at Bangladesh Bank. The Chairperson may invite any person whose presence is deemed necessary for any of its meeting(s).
Scopes and functions of the FSC have been critically discussed in the meeting. The major roles of FSC would be assisting systemic troubled banks and FIs, management of Systemic Stability, improvement of resolution regime for financial institutions; and designation of Macroprudential regulations and instruments, said the BB press release.
