TARGET GROUP | Junior- to senior-level government officials involved in setting policy for the financial sector, specifically including the staff of the central bank, financial regulatory agencies, and any other agencies involved in micro or macroprudential oversight. Participants should have an advanced degree in economics or finance (preferably at the master’s level), or equivalent work experience, a basic background in econometrics, and ability to interpret econometric results. Participants are strongly recommended to have completed the online Financial Market Analysis (FMAx) course prior to enrolling in this course and have a working knowledge of Excel. It is also preferable for participants to have taken the Financial Sector Surveillance (FSS) course as understanding underlying financial sector risks is important for the design of mitigating policies.
DESCRIPTION | This two-week course, presented by the IMF’s Institute for Capacity Development, begins with an overview of the transmission of risks within and between the financial and real sectors. Participants will then examine the design and impact of financial sector policies aimed at mitigating vulnerabilities by starting with the underlying rationale for microprudential and macroprudential policies. The interactions between macroeconomic policies and prudential policies will also be discussed. Although the emphasis will be on dealing with preventive strategies, the course will discuss policies to deal with distress situations. A combination of lectures, case studies, and hands-on workshops will allow participants to discuss and experiment with various policies to gauge their intended and unintended outcomes. Those participants who are primarily interested in using tools for risk assessment are referred to the Financial Sector Surveillance course where this is the focus.
Upon completion of this course, participants should be able to:
• Identify the potential transmission channels of shocks between the financial sector and the real economy, as well as within and across the financial systems
• Analyze appropriate micro and macroprudential policies, including their interactions with other policies and possible unintended consequences
• Recommend suitable macroprudential tools to prevent and mitigate systemic risk and point to specific implementation challenges
• Assess the effectiveness of micro-prudential, macro-prudential and crisis management policies