Pakistan's plans consolidated supervision
Pakistan's central bank is moving towards a consolidated supervision system, said Shamshad Akhtar, the governor of the State Bank of Pakistan, in a speech detailing a ten-year strategy for the financial sector.
The governor said that with commercial banks with other non-bank financial institutions, the current regulatory architecture can leave some parts of the same institution under-regulated.
Consolidated supervision in Pakistan can be best achieved by ensuring that all deposit and lending institutions are under oversight of the central bank, the governor explained. She also noted that banks made major advances in implementation of Basel II.
Yet, they face challenges in areas such as the limited availability of credit ratings for counterparts. Only one-sixth of on-balance sheet exposures have ratings.
To speed up the implementation, the central bank has made it mandatory for banks to carry out internal risk ratings. The governor in addition highlighted the successful launch on 1 July of the Pakistan real time gross settlement system for wholesale transactions.
To read the speech, click here.
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