The empowerment of human resource in member institutions would be the high point for discussion at a three-day regional conference on WTO and Basel Committee and the Financial Sector Industry being organised here from March 17 to 19, 2005. The conference is being organised by the Association of National Development Financial Institutions in member countries of Islamic Development Bank (ADFIMI). Around 100 participants are expected from the banking sector and the industry. The ADFIMI is an international organisation based in Istanbul, Turkey, having 54-member institutions drawn from 20 Muslim countries.
According to details of the conference released here by ADFIMI, both the WTO and Basel are part of regulatory framework aimed at regulation and supervision of trade and finance sector at the international level. The regulators as well as the institutions regulated ie the banks and corporate trade organisations in countries other than G-10 member countries need to understand the implications of post-WTO and Basel scenario.
Following the adoption of Basel-I by more than 100 countries on voluntary basis it is also expected that Basel-II aimed at international convergence of capital and risk measurement will also be followed by countries other than G-10.
The measurement of risk has gained importance over time due to the internationalisation of the financial sector industry and use of complex financially-engineered products structured by large international institutions. The bankers of developing countries are steadily progressing towards the path of international banking. After employing with the financial sector reforms initiated in their respective countries they are now embracing themselves with the knowledge and expertise to improve their risk measurement to gradually adopt Basel-II. The guidelines issued by Bank of international settlements are being followed depending upon the stage and capacity of that particular sector.
In Pakistan, the financial sector reforms are being successfully implemented. Separate prudential regulations for commercial banks, SMEs and micro-finance institutions have been put in place. Recently, the State Bank of Pakistan (SBP), has decided to allow banks/DFIs to undertake derivatives business, provided that they meet the eligibility criteria.
After issuing guidelines of risk management the SBP is working on capacity building to adopt the Basel-II. The plan is being chalked out in the light of the capacity of the financial sector.
The conference is aimed at enlightening the participants about the WTO and impact of Basel-II. The WTO encourages open and liberal trade policies. The threat of liberal trade to the less developed countries is at the same time opportunity for the financial sector as the multilateral trading system means new opportunities of investment.
This seminar aims at enhancing the understanding of bankers, regulators and corporate clients in the context of changing environment that demands the involvement of supervisory authorities and the financial sector industry as partners. The objectives of the programme are to share and discuss the problems being faced in implementation of WTO and Basel-II, ie Basel Core Principles for effective banking supervision. The new Capital Accord and the basic concept of Basel-II. The Impact of WTO on the financial sector industry, internationally recognised bank supervision and risk management best practices and sharing of experience of other countries in implementation of WTO and Basel-II.
SBP Governor Dr Ishrat Husain, ADFIMI Chairman Rashid Zahir, Secretary-General Orhan Sagci, Murat Mazibas from Banking Regulations and Supervision Agency, Turkey; Iqbal Ahmed Khan, deputy secretary-general ADFIMI; Chung Chee Leong, director, Bank Negara, Malaysia; and other professional from the financial sector industry will spoke in different sessions of the conference.
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