A crucial meeting was convened with an expert from the Swiss National Bank, with the support of the International Monetary Fund (IMF), to conclude the macro stress test mission in Uzbekistan. This mission aimed to assess the resilience of the country's banking sector to various economic shocks and enhance its risk management capabilities, Central Bank of Uzbekistan reported on September 4.
The mission's primary objective was to conduct a comprehensive macro stress test, which is an essential tool for evaluating the resilience of financial institutions to various economic stressors. This mission was undertaken with technical support from the IMF and involved thorough assessments of the Uzbekistan banking sector.
Evaluation of banks' resilience
During the mission, experts reviewed the current system of stress testing for credit, market, and other risks that the Uzbekistan banking sector employs. This evaluation sought to identify potential vulnerabilities and areas for improvement in the face of economic fluctuations and unforeseen shocks.
Development of sisk models
One significant outcome of the mission was the development of advanced risk models for credit, interest, and non-interest risks. These models were formulated based on the valuable experience and best practices of the Swiss National Bank. This collaboration brought international expertise to Uzbekistan's financial landscape, enhancing the country's capacity to address potential risks effectively.
Importance of recommendations
During the meeting, both parties underscored the vital importance of the recommendations provided by the international expert. These recommendations are expected to play a pivotal role in strengthening risk management practices and the stress-testing framework within Uzbekistan's banking sector. They will enable financial institutions to proactively manage and mitigate risks, ultimately ensuring greater stability in the sector.
The meeting concluded with a commitment to ongoing cooperation between Uzbekistan's financial authorities and international experts. Both parties recognized the value of continued collaboration to further refine the country's risk management capabilities and stress-testing methodologies. This cooperation is expected to contribute to the sustained stability and resilience of Uzbekistan's banking sector.
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