Background

The Bangladesh Bank (BB) has requested technical assistance (TA) to support capacity building and operations in: (i) developing local bond markets; (ii) strengthening risk-based auditing, and (iii) implementing International Financial Reporting Standards (IFRS). The recently completed 2010 FSAP Update mission underscored the need to consolidate progress made in the area of accounting and internal audit to buttress market discipline and transparency. In addition, The 2010 FSAP Update mission has also emphasized the need to further develop the securities market, which is a critical component of a robust financial market.

Project

Purpose: This project complements other technical assistance activities regarding banking supervision currently being undertaken by the authorities. In particular, it is expected that the project helps the BB to recreate capacity concerning:

·  Regulations that conform with recognized international practices, as recommended by the 2010 FSAP Update mission.

·  Development of infrastructure and supporting arrangements for the operation of primary and secondary markets for government securities issuance and trading to improve efficiency, governance, and transparency.

·  Development of an active secondary market in government securities to serve as the foundation for the broader development of capital markets in Bangladesh.

·  Development of accounting systems towards sustainable capacity in providing reliable financial data for both financial control and external reporting, consistent with recognized international standards and practices.

·  Development of a risk matrix of the BB's operations and improved staff capacity in risk-based auditing in conjunction with internal audit programs for the conduct of risk-based audits that would enable the shift to a risk-based supervisory framework, as recommended in the 2010 FSAP Update.

Better financial stability analysis including through the timely production of financial indicators to enhance the capacity of the BB to provide oversight of financial markets.

Project LIFE TIME is 8 months, starting in May 2010

Project BUDGET is $305,000

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