IFC, a member of the World Bank Group, has launched a seminar series in Russia to help improve the banking sector’s risk management and capital allocation practices. The initiative targets mainly midsize and regional Russian-owned banks, as well as the broader banking sector.

The first seminar, “Liquidity and Interest Rate Risk Management in the International Practice,” was held in Moscow in April 2008. Experts from IFC, the KBC Group, KPMG, Reuters, and Ramasoft made presentations on international best practices and on their organizations’ recent experiences. More then 100 bank managers and specialists from 56 banks participated in the seminar.

“Given the uncertainty and heightened risk in global financial markets, Russian banks need to strengthen their internal control and risk management systems and improve their capacity for formulating coherent business strategies with sound underlying capital management. This seminar series will address a vital need of the banking sector,” said Judit Burucs, project manager of the IFC Russian Banking Advisory Project.

Since its launch in September 2007, the IFC Russia Banking Advisory Project has developed a toolkit on working with banks. This includes a two-phase approach, with diagnostic and implementation phases. IFC has also designed a risk management operations’ analysis questionnaire for banks, covering areas such as risk management, asset and liability management, internal controls, and capital management. “The questionnaire not only provides guidance for any diagnostic team to analyze a particular bank, but it also helps the management of a bank perform a self-assessment,” explained Burucs.

IFC prepares guidelines on the management of different types of risk as well as general risk management policies. Most recently, it completed a comprehensive diagnostic of the risk management situation at LOCKO Bank, a Moscow-based, midsize bank and an IFC investment client.

Additional seminars will be organized in St. Petersburg and Yekaterinburg in June 2008. For more information contact JBurucs@ifc,org.

The IFC Russia Banking Advisory Project is supported with funds from the governments of Finland and the Netherlands.