FE Report (January 19, 2011)
Bangladesh Bank (BB) Governor Atiur Rahman said Tuesday the country's banking sector is not too big or too important in global context to fail like the banks in developed countries, reports BSS.
The Governor, addressing a high-level meeting of the Financial Supervisory Institution (FSI) and Executives' Meeting of East Asia-Pacific (EMEAP) Central Bank in Kuala Lumpur, was confident enough about the stronger position of the country's banking sector in future.
The main focus of this year's FSI-EMEAP meeting was on better supervision and better banking in a post-crisis era.
"Our banking institutions are as yet nowhere near global stature to fail", stature," he said, giving a brief on the government and the central bank's initiative to make banking sector vibrant during the recent global recession.
The Governor's comment came when the country's capital market witnessed another major volatility, prompting the regulator to suspend share trading for the second time in less than two weeks.
The fall in the capital market has also generated a speculation on its impact on the banking sector as most banks are closely related with the stock market not only as listed companies, but also for their strong presence in share trading.
"In Bangladesh Bank we keep track of developments in supervisory approaches and techniques in Basel based expert forums as also in various regional forums. Aspects of the newer approaches that are of immediate relevance to our domestic context are adopted as soon as practicable; implementation experiences elsewhere of approaches that are likely to be of future relevance as our markets and institutions develop and open up further are also monitored duly," he said.
Mr Atiur Rahman said banks in Bangladesh are now busy in adjusting themselves properly to the Basel II capital regime and its attendant risk rating and risk management structures and at the same time preparing for Basel III capital requirement enhancements, which would be phased in near future.
Besides, he said, regular stress testing has been introduced mandatorily to bring out vulnerabilities in banks.
The Governor, however, admitted that limited openness to external markets saved the banks in Bangladesh 'from contagion and debacle in the recent global crisis' when well-exposed banks in western market suffered serious crisis.
The Governor, addressing a high-level meeting of the Financial Supervisory Institution (FSI) and Executives' Meeting of East Asia-Pacific (EMEAP) Central Bank in Kuala Lumpur, was confident enough about the stronger position of the country's banking sector in future.
The main focus of this year's FSI-EMEAP meeting was on better supervision and better banking in a post-crisis era.
"Our banking institutions are as yet nowhere near global stature to fail", stature," he said, giving a brief on the government and the central bank's initiative to make banking sector vibrant during the recent global recession.
The Governor's comment came when the country's capital market witnessed another major volatility, prompting the regulator to suspend share trading for the second time in less than two weeks.
The fall in the capital market has also generated a speculation on its impact on the banking sector as most banks are closely related with the stock market not only as listed companies, but also for their strong presence in share trading.
"In Bangladesh Bank we keep track of developments in supervisory approaches and techniques in Basel based expert forums as also in various regional forums. Aspects of the newer approaches that are of immediate relevance to our domestic context are adopted as soon as practicable; implementation experiences elsewhere of approaches that are likely to be of future relevance as our markets and institutions develop and open up further are also monitored duly," he said.
Mr Atiur Rahman said banks in Bangladesh are now busy in adjusting themselves properly to the Basel II capital regime and its attendant risk rating and risk management structures and at the same time preparing for Basel III capital requirement enhancements, which would be phased in near future.
Besides, he said, regular stress testing has been introduced mandatorily to bring out vulnerabilities in banks.
The Governor, however, admitted that limited openness to external markets saved the banks in Bangladesh 'from contagion and debacle in the recent global crisis' when well-exposed banks in western market suffered serious crisis.
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