PMA Finalizes Guide to Risk-Based Supervision

The PMA announced today that it had completed the project for developing a comprehensive new Risk Based Supervision manual to be used by the PMA inspectors in the banking supervision department. The manual enables the PMA to keep abreast with international best practices and standards in banking supervision and the continuous developments in that respect. In particular the standards published by the Basel Committee on Banking Supervision.

The project, which was initiated by the PMA some time earlier, had been assigned to an internal team which received technical support from the International Monetary Fund (IMF). As the first phase of the project, aimed at the preparation of the manual, is close to completion, the second and implementation phase is expected to start in accordance with a detailed plan of action. Before reaping success, this phase has to overcome several challenges and requirements, including securing cooperation between the PMA and the banks. 

This project is undertaken in tandem with an existing project for Basel II implementation as both projects closely relate and integrate. In Basel II, Pillar 2 set forth duties and responsibilities assigned to supervisory authorities, which require them to update supervisory methodologies and tools in order to improve and promote governance and risk management of banks in a manner that contributes to enhancing capital adequacy and, thus, the ability to face risks associated with banking. Consequently, the objectives of achieving soundness and stability of the banking system and preserving the funds of the general public can both be attained.