By Charumini de Silva
Ceylon Finance Today: Sri Lanka's banking watchdog, the Central Bank yesterday confirmed that 41 financial consolidation plans have been implemented of which 36 have been approved by the Monetary Board.
Central Bank Governor, Ajith Nivard Cabraal said that they are on track to achieve the targets that were set by the bank to monitor, identify and track the sources of systemic risk over time to ensure financial system stability.
He said that the biggest function that they undertook this year was the consolidation process. There are 36 confirmed consolidation plans, which have been approved by the Monetary Board and altogether 41 plans have been implemented. Cabraal said, "Over a long period of time we have seen that there were many weaknesses in our financial system. We have been responding to those weaknesses in various ways and each year we have been made improvements, but overall we have not dealt with the root causes which caused instability.
So, there were times where financial companies failed, banks were shaken, and the knock-on effect felt by the other players for a long time and this had become a bit of a habitual situation as well." Reflecting on the measures taken by the Central Bank he said, "We also took some bold decisions. One was to change the laws in order to provide the incentives for mergers to take place, engaged the key consultancy free of charge to the recipients in order to ensure fair play in the due diligence activity as well as there were no constraints as a result of fees having to be paid.
"It was a cohesive effort and not something suddenly thought through however, many thought it was ambitious, yes it was ambitious. But we have diligently worked through that, in order to make it real. Today, we have seen that those efforts are bearing fruits," he added.
www.ceylontoday.lk
Ceylon Finance Today: Sri Lanka's banking watchdog, the Central Bank yesterday confirmed that 41 financial consolidation plans have been implemented of which 36 have been approved by the Monetary Board.
Central Bank Governor, Ajith Nivard Cabraal said that they are on track to achieve the targets that were set by the bank to monitor, identify and track the sources of systemic risk over time to ensure financial system stability.
He said that the biggest function that they undertook this year was the consolidation process. There are 36 confirmed consolidation plans, which have been approved by the Monetary Board and altogether 41 plans have been implemented. Cabraal said, "Over a long period of time we have seen that there were many weaknesses in our financial system. We have been responding to those weaknesses in various ways and each year we have been made improvements, but overall we have not dealt with the root causes which caused instability.
So, there were times where financial companies failed, banks were shaken, and the knock-on effect felt by the other players for a long time and this had become a bit of a habitual situation as well." Reflecting on the measures taken by the Central Bank he said, "We also took some bold decisions. One was to change the laws in order to provide the incentives for mergers to take place, engaged the key consultancy free of charge to the recipients in order to ensure fair play in the due diligence activity as well as there were no constraints as a result of fees having to be paid.
"It was a cohesive effort and not something suddenly thought through however, many thought it was ambitious, yes it was ambitious. But we have diligently worked through that, in order to make it real. Today, we have seen that those efforts are bearing fruits," he added.
www.ceylontoday.lk
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