Front Matter Page
IMF Country Report No. 18/139
LAO PEOPLE’S DEMOCRATIC REPUBLIC
TECHNICAL ASSISTANCE REPORT—THE DEVELOPMENT OF RISK-BASED SUPERVISION
May 2018
This Technical Assistance report on the Lao People’s Democratic Republic was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed on February 2018.
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© 2018 International Monetary Fund
Front Matter Page
INTERNATIONAL MONETARY FUND
Monetary and Capital Markets Department
LAO People’s Democratic Republic.
THE DEVELOPMENT OF RISK-BASED SUPERVISION
Vassili Prokopenko (Mission Chief), Yumi Kuramochi (both MCM); Joel Hefty, Richard Nun, and InWon Song (External Experts)
February 2018
Contents
Glossary
Preface
Executive Summary
I. Background
A. Overview of the Banking Sector
B. Progress Since the Last Technical Assistance Mission
II. Current Challenges in Implementing RBS
A. Supervisory Manual
a. Offsite Analysis
b. Onsite Examination Procedures
B. Capacity Building of BSD Staff
C. Consolidated Supervision and Cross-Border Supervisory Cooperation
D. Review of the Legal and Regulatory Frameworks
E. Regulatory Response
III. Future TA Needs
Tables
Table 1. Main Recommendations
Table 2. Status of Recommendations of the April 2017 TA Mission
Figures
Figure 1. Risk Level and Mitigation Relationship
Glossary
| BoL |
Bank of Lao |
| BSD |
Bank Supervision Department |
| CAELS |
Capital, Asset Quality, Earnings, Liquidity, and Sensitivity to Market Risk |
| CAMELS |
Capital, Asset Quality, Management, Earnings, Liquidity, and Sensitivity to Market Risk |
| FIRST |
Financial Reform and Strengthening Initiative |
| FSIs |
Financial Soundness Indicators |
| IP |
Institution Profile |
| MCM |
Monetary and Capital Markets Department (IMF) |
| NPL |
Nonperforming Loan |
| RAS |
Risk Assessment Summary |
| RBS |
Risk-Based Supervision |
| ROX |
Report of (Onsite) Examination |
| TA |
Technical Assistance |
Preface
At the request of Bank of Lao P.D.R. (BoL), a Monetary and Capital Markets Department (MCM) technical assistance (TA) mission visited Vientiane, Lao P.D.R., during the period November 13–24, 2017. The main objective of the mission was to further assist the Banking Supervision Department (BSD) of the BoL in transitioning to risk-based supervision (RBS) of banks. The mission team held discussions with Deputy Governor Vathana Dalaloy and staff from the BSD. The mission is grateful to the BoL’s management and staff for their excellent cooperation and warm hospitality which greatly facilitated its work.
