(Washington, DC) ¡¯s Public Debt Management Advisory team completed its inaugural Sovereign Balance Sheet Risk Management workshop in Jakarta, Indonesia, on February 22. This five-day innovative training built expertise and shared knowledge about sovereign balance sheet risk management with 27 practitioners from finance ministries and central banks from 12 countries. Using a framework that looks at a sovereign¡¯s assets as well as liabilities, also known as the SALM framework, the workshop aimed to increase participants¡¯ expertise in identifying, measuring and mitigating different types of risks, affecting both sides of a sovereign balance sheet. This workshop was developed and delivered under the Government Debt and Risk Management (GDRM) Program supported by the State Secretariat for Economic Affairs (SECO) of Switzerland.
¡°The course provided participating countries a different yet very important perspective on managing risks by considering the assets and liabilities of the entire public sector,¡± said Ms. Sharon P. Almanza, Deputy Treasurer of the Philippines, who attended the workshop. ¡°Usually, countries only take into account one side of the balance sheet, particularly debt or borrowings. But the workshop stressed the importance of having a balance sheet risk management framework that integrates assets and liabilities--including contingent liabilities and consolidating the position of the entire public sector,¡± explained Ms. Almanza. ¡°I learned the importance of really understanding and monitoring individual balance sheet risks, natural hedges, and the importance of proper coordination and communication among government entities.¡±
The workshop curriculum covered topics such as managing foreign currency risk, interest rate risk, liquidity risk, and credit risk using presentations from practitioners and case studies. It also provided a forum for candid exchanges and idea sharing among peers from across the world.
¡°In terms of learning, it was one of best workshops that I have ever attended,¡° said Mr. Muhammad Umar Zahid, Market and Financial Risk Specialist in the Ministry of Finance of Pakistan.
Delivered by the World Bank Treasury, which manages portfolio of US$200 billion in debt and US$150 billion in assets
¡°This workshop is the first of its kind,¡± said M. Co?kun Cang?z, the Head of Debt and Risk Management at the World Bank Treasury. ¡°Å·ÃÀÈÕb´óƬ Treasury has been managing the ) balance sheet for more than 70 years; we have substantial experience and knowledge in asset and liability management and use the workshop¡¯s consolidated approach in our own operations. Practitioner expertise and experience are this basis of the workshop and we augment them with country examples.¡±
The Sovereign Balance Sheet Risk Management workshop represents the latest addition to the workshop portfolio of the World Bank Treasury¡¯s Public Debt Management Advisory team. These training modules also cover four other key pillars of public debt management: Designing Government Debt Management Strategies, Implementing Government Debt Management Strategies, Assessing and Managing Risks from Contingent Liabilities, and Cash Management.
In addition to these workshops, the team delivers on-site missions, knowledge products, webinars, seminars, forums, and peer group dialogues to help build the human capital of public debt and risk management officials worldwide.
