Central Banking Technical Assistance to Countries in Transition

Statement of the Bank of Lithuania

Susana Almuina, Ian McCarthy, Gabriel Sensenbrenner, and Justin Zulu
Published Date:
December 1995
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Domestic Arrangements for Coordination of Technical Assistance

Coordination of technical assistance in the Bank of Lithuania is the responsibility of senior management. As a Member of the Board of the Bank of Lithuania, I am currently the designated coordinator, working closely with the directors of the main professional departments (International Department, Monetary Policy Department, Banks* Supervision Department, Accounting and Settlements Center, and Personnel Division) in requesting and selecting technical assistance from donors. The Board of the Bank of Lithuania receives information concerning the need for technical assistance from the departments through the coordinator, who in turn presents this information to the Chairman and his deputies for discussion.

Acceptance of assistance is the responsibility of the departments of the Bank of Lithuania, which are also responsible for the use of the requested assistance and for reporting the results to the coordinator. In considering the technical assistance offers, both the immediate and the long-term priorities of the Bank are taken into account. From past experience in accepting technical assistance, the Bank of Lithuania prefers donors who respond promptly to requests and who send knowledgeable advisors and who can take up work without lengthy introductions. One of the chief priorities in selecting donors is that the size and bank structure of the advisor’s country be similar to that of Lithuania. Also of great value are the relations that the country has traditionally maintained with Lithuania.

Relations with Donors and Other Recipients

The Bank of Lithuania has found that it is quite problematic when the donor is slow in making decisions on providing technical assistance, because by the time the assistance finally arrives the situations and priorities may have changed. Another obstacle that is not uncommon is the stereotyping of recipients—that similar countries always have similar problems (for example, bank privatization). The Bank of Lithuania tries to respond to received assistance by informing the donors thereof of the positive results of the assistance and of its desire to continue cooperation in the future. We usually try to work together with the advisors to formulate plans for further assistance. The Bank also expresses its gratitude to foreign embassies for their helpful mediation between their governments and central banks and the Bank of Lithuania on issues of technical assistance. The departments of the Bank also try to get information concerning the experience of the other Baltic countries’ central banks (for example, the currency board and the coordination of technical assistance in Estonia, the procedures for bank bankruptcy and staff training in Latvia), as well as those of Eastern and Central Europe (Poland, Hungary). As there is a definite language barrier when it comes to training, we have found that the organization of courses in our country with interpretation has been very effective. Such courses allow for a broader audience, and also make it easier for us to tailor topics to our specific needs. The Bank also tries to arrange for advisors to deliver lectures to the staff during their stay at the Bank.

At this time, the Bank of Lithuania considers that specialized training would be much more valuable than general training and is particularly interested in internships. The focus on internships, which was rather popular some time ago, lost some of its momentum when the Bank realized that although it was theoretically ideal, it could not be effective in practice. This opinion was not ungrounded: such training is marred by the fact that each economic system differs in both legislation and tradition. However, we would like to orient our position on relationships with the divisions of the central banks of the donors which carry out similar functions as the divisions of the Bank.

One problem that has been ignored, as it is not considered to be a banking problem, is the need for quality translation and interpretation services on banking issues. The Bank of Lithuania has faced considerable difficulty in training its translators and interpreters in banking English. The training that the employees receive at the Bank is not sufficient. Obviously, staff fluent in English, particularly in the financial field, would be ideal. However, this does not seem likely in the immediate future, so for the time being we have to concentrate our efforts on training the staff that we have. We would like to deliver instruction in both general banking and specific training for interpreters and translators. The courses preferred by the Bank of Lithuania staff are those offered by the Bank of England’s Center for Central Banking Studies, which could be held either in the United Kingdom or in Lithuania.

Evaluation of the Effectiveness of Technical Assistance

  • The key elements in successful technical assistance are as follows:

  • Continuity of advisors.

  • Timely response to needs.

  • Long-term advisors for practical work in establishing new areas in the Bank (for example, IMF resident advisor, Hannu Makelainen, in the International Department).

  • Exchange programs for specific training in certain departments.

  • Clear and precise requests for assistance from the recipient central banks.

  • Sharing of experience with other banks that are getting technical assistance and that are also in transition economies.

  • The cooperation of multilateral donors with the related governmental institutions in shaping the role of the central bank in the economy and the significance of its independence.

  • The swift response of multilateral donors to changes in requests. For example, for the IMF courses at the Joint Vienna Institute the selection of participants is a considerably long process, and after the decision has been made it is virtually impossible to change candidates, even if a previously nominated candidate has left the bank or has moved to a new position. Even though most people who leave the central bank continue working in the banking system, thereby contributing to the progress of Lithuania, the Bank of Lithuania needs to send its own people.

  • Expert advice of international organizations such as the IMF. These organizations have extensive knowledge of the areas in which the donor central banks are very strong and can share their experience. This would help the recipients in addressing the right central bank for the right kind of experience. This would also preclude several donors from offering assistance in the same area and would prevent requests for assistance in the same area from being sent to several donors.

Other Issues

The Bank of Lithuania has provided technical assistance by sharing its experience with other countries. A representative from Azerbaijan visited the Bank of Lithuania to examine the payments area and to learn how to open correspondent accounts in Azerbaijan. A team of representatives from several departments (Supervision, Monetary Policy, and International) of the Bank of Estonia also came to meet with their Lithuanian counterparts and to share their experiences. The Bank of Lithuania was also visited by a delegation from Uzbekistan to discuss monetary policy, the Interbank Exchange, and statistics.

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