IMF | SARTTAC

Target Audience

Junior to senior government officials engaged in setting policy for the financial sector, particularly the staff of central banks, financial regulators, and any other agencies involved in micro- or macroprudential oversight.

Qualifications

Participants should have an advanced degree in economics or finance or equivalent work experience; a basic understanding of econometrics; the ability to interpret econometric results; and a working knowledge of Excel. It is highly recommended that applicants first complete the online Financial Market Analysis (FMAx) and Financial Sector Surveillance (FSS) courses because understanding and assessing financial sector risks is important to the design of mitigating policies.

Course Description

This course, presented by the ICD, begins with an overview of how risks are transmitted within and between the financial and real sectors. Participants then examine the design and impact of financial sector policies for mitigating vulnerabilities by starting with the rationale for both microprudential and macroprudential policies. The interactions between macroeconomic and prudential policies are also discussed. Although the emphasis will be on preventive strategies, the course will discuss policies to deal with distress situations. The combination of lectures, case studies, and hands-on workshops allows participants to discuss and experiment with various policies to gauge their outcomes, intended and unintended. Those who are primarily interested in risk assessment are referred to the Financial Sector Surveillance course, where that is the focus.

Course Objectives

On completing this course, participants should be able to:

• Identify channels through which shocks are transmitted between the financial sector and the real economy, and within and between financial systems.

• Analyze relevant micro- and macroprudential policies, how they are likely to interact with other policies, and any possible unintended consequences.

• Recommend macroprudential tools to prevent and mitigate systemic risk and identify likely specific implementation challenges.

• Assess the effectiveness of microprudential, macroprudential, and crisis management policies.