PROGRESS REPORTS

MENA Financial Regulators' Training Initiative
Under the Partnership for Financial Excellence
Summary of the First Consultative Group Meeting
July 28, 2004
The Arab Monetary Fund hosted the first Consultative Group (CG) meeting for the MENA Financial Regulators' Training Initiative on Wednesday, July 28, 2004 in Abu Dhabi. Over 20 participants from the region and from the United States attended. Overall, participants enthusiastically supported the MENA Financial Regulators' training initiative and were eager to see the courses commence in the region. The participants discussed and agreed to a number of administrative and substantive matters.

Under the MENA Financial Regulators' training initiative, the U.S. regulatory agencies will deliver bank supervision training courses on a rotating basis throughout the region. While the primary focus will be on delivering the training programs, other activities, such as exchange programs and workshops for senior regulatory policy makers, will also be held as part of this activity.

The following are the main highlights from the meeting:

First training course this December 2004: The regional members requested that the first training program be offered in early December on risk-focused supervision (a one week course offered by the Federal Reserve). Egypt (the Central Bank of Egypt and the Egyptian Banking Institute) offered to host the first training session. Based on input from countries on which courses they would like to participate in and/or host, the U.S. regulators will pull together a course calendar for 2005 that would reflect the timing and location for the courses to be offered next year.

High-level Policy Seminar to be arranged next year: Lebanon suggested and other CG members strongly concurred that, in addition to training programs for junior-to mid level examiners, a seminar be offered for senior regulators and key decision-makers in bank supervisory agencies on international best practices on the same topics as the other training programs. The U.S. participants will arrange this seminar next year in Lebanon.

Virtual Secretariat for now: The group had a healthy debate on whether a Secretariat needs to be located within the region to manage this activity. Few were supportive of the idea to set up a permanent body in the region, because of the administrative and cost burden that this would entail. The group agreed to the idea of, for now, setting up a website that would provide information on the training activities and serve as a virtual Secretariat to oversee these activities. The U.S. delegation will explore options of bringing on a project manager soon who would set up the website and take over administrative responsibilities of the training activities.

Next CG meeting: The Consultative Group agreed to meet again in mid-January to early February - after the first training course and also after the launch of the website - to provide an opportunity to assess progress and recommend any changes. Location of this meeting will be determined.


Seminar on Risk-Focused Supervision & Risk Assessment

The first regional supervisory training event under the MENA Financial Regulators' Training Initiative was conduced by the Federal Reserve System in Cairo, Egypt, during December 12-16, 2004. The Egyptian Banking Institute and the Central Bank of Egypt were the host institutions. This popular hands-on training event combined lectures with case-studies and group work in order to reinforce the materials covered during the seminar. The program covered issues related to the risk-focused supervision examination process, examination documentation, credit risk assessment, including credit risk examination techniques modeling. It also provided an overview operational risk assessment and operational risk examination techniques and modeling. Market and liquidity risk assessment and related examination techniques were also covered. The program concluded with an aggregate risk assessment lecture and case-study.

The Federal Reserve team was led by Mr. Sarkis Yoghourtdjian, Manager of the Division of Banking Supervision & Regulation at the Federal Reserve Board. Lecturers/facilitators from the Federal Reserve also included Mr. Robert Walker, Senior Supervisory Financial Analyst at the Federal Reserve Board; Mr. Alejandro LaTorre, Examining Officer, at the Federal Reserve Bank of New York; and, Mr. Michael Johnson, Vice President at the Federal Reserve Bank of San Francisco. Dr. Muhammad Baasiri was a special guest lecturer on issues related to risk, compliance, and controls assessments in the area of anti-money laundering and financial crimes. Dr. Baasiri is the President of the newly created MENA FATF and Secretary of the Special Investigation Commission of Lebanon.

Forty-seven participants from eleven countries in the region attended the event which was rated very highly for course content, material, instruction and administration. The program was a resounding success.

Many thanks go to Dr. Tarek Amer, the Deputy Governor of the Central Bank of Egypt and Dr. Hala El-Said, the Executive Director of the Egyptian Banking Institute for their tireless efforts to assure the success of the event.


MENA Financial Regulators' Training Initiative
Under the Partnership for Financial Excellence
Summary of the Second Consultative Group Meeting
Hosted by the Central Bank of Egypt and the Egyptian Banking Institute
Cairo, Egypt on January 31, 2005
The second Consultative Group (CG) meeting for the MENA Financial Regulators' Training Initiative (MENA Initiative) was held on Monday, January 31, 2005 at the Central Bank of Egypt. Over 20 participants from the region and from the United States, and the new Program Manager, attended. The participants discussed the feedback from the course participants during the first seminar held December 12-16th in Cairo. The Executive Director of the EBI noted that most participants were very pleased with the course but some felt the training was too short and too intense within the time-frame. The discussion included the importance of pre-course reading material, ideal size of class, the possibility of training of regional trainers to offer the courses again, and how best to use work groups for case studies. The US regulators will incorporate these comments into planning for future training courses.

The 2005 course calendar was presented which prompted a lengthy discussion on the following: Other topics discussed include the plans for launching a website for the MENA Financial Regulators' Training Initiative, the mission statement, and the initial plans for a senior policy seminar scheduled to be in Lebanon in 2005. There was also some discussion on arranging study tours to the USA for the region. The main issue was the human resource limitation of the US regulatory agencies but added that a limited number of study tours could be arranged. The US regulators will be discussing collaboration with outside parties, now active in the region, on such study tours. The next CG meeting will take place at the end of 2005 to discuss plans for 2006 training schedule.