IFC and Risk Management
The objective of IFC's Global Risk Management advisory program is to strengthen financial institutions' risk management capacity and frameworks, loan portfolio monitoring, and nonperforming loan (NPL) management and workout capacity, while supporting the development of emerging distressed asset markets.
Although initially launched in response to the 2008 global financial crisis to address risk management and NPL challenges in emerging markets, the program now works with client financial institutions to help them implement better risk management systems and processes to increase their resilience to future crises. Through longer-term engagements and in-depth institutional building efforts, the program focuses on governance, market risk, liquidity risk, credit risk, operational risk, asset liability management, and capital adequacy.
At the sector level, IFC disseminates best practices and raises awareness of risk management issues. Since early 2009, IFC has held 150 risk management workshops and conferences for the financial section in 36 countries across all its regions, including Eastern Europe and Central Asia, Sub-Saharan Africa, South Asia, East Asia and Pacific, Latin America and the Caribbean, and the Middle East and North Africa.
As part of its knowledge management agenda, the program develops risk management tools to identify issues and support capacity-building work with client financial institutions. The program also supports the development of emerging distressed asset markets, especially in Europe and Central Asia, which is part of a wider sector-level initiative closely coordinated with the World Bank.
For more information on risk management, read the World Development Report 2014: Risk and Opportunity Managing Risk for Development.
(See Agriculture; Social, Urban, Rural, and Resilience.)