Why is the development of sound financial systems in developing countries important?
Theoretical and empirical evidence shows that financial development has a positive and last- ing effect on growth and facilitates the process of economic stabilization. In addition, greater stability and integrity of financial systems help to improve resilience against crises and their negative impacts and contribute to economic growth and poverty reduction. The capacity of central banks is essential to macroeconomic stability and ensures a better functioning of the domestic financial system.
Objectives and activities
The main objective of the Bilateral Assistance and Capacity Building Program for Central Banks (BCC) is to build local capacities at cen- tral banks to ensure sound and independent macroeconomic management, full local own- ership of reform programmes, and a sustained effort to implement financial sector reforms.
To achieve these objectives, the BCC program encompasses the following activities: i) technical assistance and capacity building, ii) applied research on key monetary issues through visit- ing and coaching programs, iii) conferences in Switzerland and in partner countries.
Technical Assistance and Capacity Building
The main objective of this component is the strengthening of domestic institutions through building-up technical capacities to ensure the full and sustainable implementation of reform policies. Emphasis is given to the following six areas which are vital for monetary and finan- cial sector stability and financial integration: i) monetary policy analysis and implementation,
ii) financial market development, iii) bank su- pervision and regulation, iv) macroeconomic accounting and statistics, v) operational risk management and business continuity planning, and vi) human resource management.
Visiting and Coaching Programs
The overall objective of this component is to undertake research that is of relevance to the country program and specifically to the areas of financial integration, macroeconomic and finan- cial stability, macro prudential supervision, and financial market development. Research will be undertaken either by visiting the implementing institute as part of inresidence programs that combine technical training and participation in research projects or via coaching through an expert from the implementing institute.
Conferences in Switzerland and in partner countries
This component is promoting peer-to-peer exchanges between relevant policy makers in partner countries, practitioners from other countries and regions, and leading internation- al academics, as well as for disseminating the results of the research and TA activities. The Graduate Institute organizes one annual inter- national conference in Geneva. Additionally, a regional conference will be organized regularly in of the partner countries. The regional conference addresses policy issues relevant for central banks in the respective region.
The program is implemented by the Gradu- ate Institute of International and Development Studies of Geneva. The mandate includes identification, preparation, implementation and supervision of technical assistance programs in selected beneficiary countries. The Graduate Institute developed and maintains an expert database of academics and practitioners in order to be able to respond to TA and capac- ity building requests of partner central banks. The BCC program is guided by the Steering Committee (SC), which is composed of SECO and the Graduate Institute. It sets the strategic direction of the BCC program and oversees/ monitors the implementation of the program activities. SECO ensures that activities are co- ordinated and aligned with those of other Swiss stakeholders, notably the Swiss National Bank.
How to get involved
The program is targeted to SECO priority coun- tries. Currently, the central banks of Albania, Azerbaijan, Bosnia and Herzegovina, Colom- bia, Ghana, Peru, Tunisia and Vietnam are par- ticipating in the program. Definition of country programs is taking place in coordination be- tween interested central banks, the local SECO offices and SECO Headquarters.