Financial Sector Surveillance Course

Financial sector surveillance has been reinforced since the Global Financial Crisis, and any financial crisis event serves as a reminder of the importance of assessing well in advance the various vulnerabilities, triggers, and symptoms of such events in financial markets. Given the interest and relevance of this topic for central banks and ministries alike, the JVI hosted in March 2023 an IMF Institute for Capacity Development course on Financial Sector Surveillance (FSS). 

This course introduces participants to key concepts and tools used in the identification and assessment of financial sector vulnerabilities and sources of strength. It provides a basic toolkit to assess financial sector risks and measure them against existing capital and liquidity buffers in the financial system. The discussions focus on the early identification of unwarranted macro-financial imbalances and the analysis of the transmission of financial distress across institutions, markets, and economic sectors, with the objective of reducing the likelihood and the severity of financial crises. 

A group of 30 participants from 15 countries attended this two-week in-person course, which involved 15 lectures and 14 workshops applying essential risk assessment techniques. This course covered core topics including market, interest rate, credit, funding and liquidity risks, and stress testing. It also studied systemic risk and macro-financial linkages, financial stability issues, and climate risk. A joint guest presentation was delivered by the Austrian National Bank’s Financial Stability Department and a JVI economist on “Financial Stability Surveillance in Austria and at the European Central Bank”. In addition, participants prepared final presentations on the financial stability situation in Türkiye, Switzerland and Italy. This exercise, based on country cases, led to lively discussions and full coverage of the various aspects of the course studied during the lectures and workshops sessions, and effectively complemented the two-week training.

Participants were engaged and enthusiastic, as financial sector issues relevant to their countries and related to the recent Silicon Valley Bank and Credit Suisse events were also discussed and analyzed. They found the course highly relevant for their work. 

Given the need to constantly monitor the financial sector, the FSS course will continue to evolve and adapt to remain current and reflect relevant issues and changes in financial markets.

Celine Rochon, Senior Economist, IMF