Financial Sector Policies (FSP)

Financial Sector Policies (FSP)

This 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 lecture, 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 (FSS) course where this is the focus.

Course Objectives: 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 microprudential 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 microprudential, macroprudential and crisis management policies.