Financial Stability Council launched
The country’s Financial Stability Council is now in operation, paving way for the consolidation of all information within the financial sector which will be handy when it comes to the regulation of the sector.
The Council was officially launched this Tuesday after months of consultations between senior officials of the finance and economic development ministry, Bank of Botswana and Non-Bank financial Institutions Regulatory Authority, Financial Intelligence Agency (FIA). Moses Pelaelo BoB Governor is thrilled that the Council, which its secretariat will be housed at the central bank is now up and running.
He made it clear, the Council is not taking any role which is being played by Financial Intelligence Agency, NBFIRA, finance ministry or the central bank itself. “It is acknowledged that the respective institutions have unique statutory mandates, objectives, oversight frameworks and operational spheres, albeit mostly related. In this regard, the Financial Stability Council is not established to usurp or dilute the role of the respective institutions, which is neither feasible nor desirable. Rather it is to share information and where, desirable, facilitate collective and coordinated approach to financial sector monitoring frameworks and crisis resolution,” said Pelaelo during the launch of the Council this week.
Speaking at the launch ceremony, FIA Director, Dr Abraham Sethibe, said the Council will further complement their role, which among others ensures financial transactions do not undermine the country’s fiunancial system. He stated FIA is more than happy that they will now be in a position to share more information with other regulators, a development which will further strengthen the country’s financial system at large. NBFIRA Chief Executive Officer, Oaitse Ramasedi , whose regulatory roles among others ensures he manages companies whose assets are over P120 billion, stated that, it has over the years become clear that they cannot manage their respective role alone ‘without collaborations’. The Council has just provided a perfect opportunity for the non-bank financial institutions’ regulatory body to cast wide open its roles for the benefit of the entire financial system.
In the coming months, the Council will be in a position to publish the Financial Stability Report, an anchor publication, providing accountability in the areas of assessment of financial stability risks and mitigation measures. “Second is agreement on a Macro prudential Policy Framework that is relevant for Botswana, in terms of risk mitigation, as well as recognising the gaps in financial inclusion and development,” said the BoB Governor in a prepared speech.
Pelaelo also noted that there is a specific need to address the challenges arising from implementation of the Anti-Money laundering and Combating the Financing of Terrorism protocols and requirements. “Fourth and related, thereto, is the requirement to decisively address the incipient misconduct and governance challenges in the financial sector, deriving from greed and/or misunderstanding or incompetence with respect to fiduciary responsibilities, as well as opportunistic crime and fraud.
There is need for a country to have a deposit protection scheme which will guarantee access to deposits up to a specified threshold. “Lastly, cooperation and collaboration among the Council members would be critical in the timely update and renewal of legislation and policies to retain and improve effectiveness of supervision, monitoring and guidance for the financial sector,” added Pelaelo.
