| Prof Ndulu |
Financial institutions have been advised to draw up their
own disaster backup plans in case of monetary crises instead of relying on
taxpayers money to bail them out.
The newly launched TFSF would solidify and co-ordinate the
country's monetary system from banking, security markets, insurance, pension
funds and consumer credit schemes.
Four financial regulatory authorities which are the Bank of
Tanzania (BoT), the Capital Markets and Securities Authority (CMSA), Tanzania
Insurance Regulatory Authority (TIRA) and Deposit Insurance Board (DIB) signed
the launch of TFTF which serves as inter-sectorial co-ordinator.
The regulators on the forum, according to the BoT Governor,
Prof Benno Ndulu, would share out information after carrying micro prudential
oversight to monitor and issue early warnings to save the economy from going
into doldrums.
"The forum is supposed to develop integrity and
safeguard the financial sector using
market-based solutions that will act as buffers for the unforeseen
shocks.
"Though the forum will not guarantee a fully pre-crisis solution
but is going to provide a bail-in and bail-out framework to prevent using
taxpayers' money for collapsing firms and draw a national financial inclusion
plan," Prof Ndulu noted.
He said at the moment the central bank issues financial
stability reports for commercial banks and financial institutions supervised by
BoT, but cannot create a wall to protect it from crises of other sectors.
The
banking sector, he said, controls between 70 and 75 per cent of total financial
assets, but the rest are shared between insurance and pension funds.
The chief guest, Deputy Minister for Finance and Economic
Affairs, Ms Janet Mmbene, said the launch came at the right time considering the
challenges that the global and national financial systems face.
Source: The Daily News, www.dailynews.co.tz, reported by Abduel Elinaza in Dar es Salaam
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