BAKU, Azerbaijan, September 11
By Jeila Aliyeva - Trend:
The prudential framework should be strengthened to preserve financial stability and integrity in Turkmenistan, Natalia Tamirisa, International Monetary Fund (IMF) Mission Chief for Turkmenistan told Trend.
She added that in order to improve Turkmenistan’s financial sector, the authorities should be encouraged to prepare specific action plans to align prudential measures with Basel standards.
“Without such plans, continued regulatory forbearance would be detrimental to the health of the banking sector,” she added.
Tamirisa noted that based on the assessment of the soundness of the banking sector, a plan needs to be made for closing non-systemic insolvent state-owned banks and privatizing or recapitalizing other state-owned banks while improving bank corporate governance.
Continued upgrading of the skills of bank regulators and supervisors is of paramount importance in the context of prudential reforms, she noted.
Also, Tamirisa said how Turkmenistan might attract more foreign investments in its financial sector.
“Wide-ranging reforms are needed to improve transparency and investment climate, modernize the financial sector, and create a market-based economy. Structural reform priorities include phasing out distortionary policy measures, promoting competition, reducing red tape, and enhancing the rule of law. Improving the efficiency of public investment---in infrastructure as well as in education and healthcare---would help to create the physical and human capital necessary to attract foreign investment and raise economic productivity,” she said.
She pointed out that another important pre-requisite is greater transparency in publishing economic and financial data and information about existing laws and regulations.
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