In order to strengthen its powers in the conduct of monetary policy, its supervisory role and to ensure financial stability especially with the multiplicity of banks, the Bank of Sierra Leone Act is being reviewed with technical assistance from the IMF. The Banking Act 2000 is also being reviewed to protect the interests of depositors and shareholders and to further strengthen the Bank’s supervisory and enforcement powers. The Bank of Sierra Leone has broadened its regulatory and supervisory frameworks to include a number of “other financial institutions” in accordance with the provisions of the Other Financial Services Act 2001, which is also being amended to ensure compliance with international regulatory standards. The Bank has issued revised prudential guidelines governing the operations of commercial banks. These guidelines have clearly specified requirements to address issues relating to capital adequacy, asset quality, liquidity, corporate governance, market risks, etc, which will be strictly enforced. The Bank has also adopted the International Financial Reporting  6  BIS central bankers’ speeches  Standards (IFRS) as its financial reporting framework and has requested the commercial banks to do likewise. Furthermore, the Bank of Sierra Leone has adopted two complementary approaches to address governance and risk management issues. Firstly, the Bank has focused on risk factors originating within the financial system and secondly, mechanisms are being adopted and implemented to address risks originating mainly from unlicensed financial institutions. Therefore, the Bank’s supervisory strategy is shifting from compliance – based to risk – focused supervision.

Thirachai Phuvanat naranubala: How to create a stable financial environment in emerging market economies Remarks by Mr Thirachai Phuvanat naranubala, Deputy Governor of the Bank of Thailand, at the International Conference of Banking Supervisors, Cape Town, 19 September 2002. *  *  *  The title of “ How to create a stable financial environment in emerging market economies ” is almost a contradiction. The events in the past few decades will bear me out. It has been difficult for emerging market economies to maintain stable financial environment over a long period of time. Crises and disturbances have erupted every now and then, resulting in losses of output, employment and livelihood. The problem is -- emerging market economies and stable financial environment do not always go hand in hand. Some of the reasons are obvious. Emerging market economies are the countries in the process of integrating themselves into the new environment of globalization. They are invariably at some points in their journeys in enhancing free trade, attracting foreign direct investments and capital inflows, adopting rule based supervision and control, and introducing market discipline. The risks to stability occur because they have to learn and put into place the framework and the machinery to regulate, supervise and monitor their financial markets in the tight time span of years what developed countries had taken decades to do. For the emerging markets, globalization is like sailing out of the inland waterway where the environment is safe and calm into the international ocean with its more choppy water.