CENTRAL BANK TECHNICAL ASSISTANCE LOAN I

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The development objective of the Central Bank Modernization Technical Assistance Project is to complement the bank's modernization effort at this crucial juncture when its motivation is high. The project will support a three-year improvement program with the primary focus on professionalizing banking supervision and mainstreaming international best practices. For the first implementation year, project components have been defined in detail, but for years two and three, detailed project components will be agreed upon during the annual reviews in mid-1998 and mid-1999 respectively. Four components comprise the project: 1) upgrading banking supervision with training and personnel exchanges; improving information flow between the central bank and the banks it supervises by updating databases and systems, and acquiring information technology equipment; reviewing accounting standards and developing cooperation protocol with external auditors; developing best practices, particularly in non-judicial enforcement actions; testing quality assurance systems; and developing outreach activities; 2) creating the legal infrastructure that will enable an appropriate framework to be established to take over the Central Bank's inventories of failed banks, and institution building to improve the central bank management's knowledge of state bank restructuring; 3) training to improve the central bank's capacity to manage its foreign reserves, to improve borrowing strategies abroad, and to enhance managerial and human resource skills applying, inter alia, best international practices; and 4) project coordination.