The Financial System Stability Committee (FSSC) was set up in 2002 when financial system stability became one of the core objectives of the Central Bank, to co-ordinate efforts to ensure that the overall system is robust and secure and that threats to the system are identified and reduced.
The main tasks of the FSSC are to :
a )
Assess the risks and vulnerabilities that may lead to financial system instabilities or imbalances and to recommend measures and policies to mitigate them, to the Governor and the Monetary Board.
b )
Monitor the financial system and to submit periodic reports to the Governor and the Monetary Board, recommending policies necessary to promote financial system stability.
c )
Prepare the Financial System Stability Review.
The FSSC is chaired by the Deputy Governor in charge of financial system stability and includes the following members:
Chairperson
Deputy Governor responsible for Financial System Stability
Members
1 )
Deputy Governor responsible for Price Stability
2 )
Assistant Governor responsible for Financial System Stability (Deputy Chairperson)
3 )
Director of Financial System Stability
4 )
Director of Bank Supervision
5 )
Director of Supervision of Non-Bank Financial Institutions
6 )
Director of Payments and Settlements
7 )
Director of Economic Research
8 )
Director of Information Technology
Secretary to the FSSC
Deputy Director, Financial System Stability
The FSSC meets once a month and at these meetings, members analyse reports prepared by relevant departments on issues and concerns relating to the stability of the financial system. Risks to the financial system are detected and measured through surveillance, which include the monitoring of financial sector stability indicators, such as macro-prudential and micro-prudential indicators. The FSC submits periodic reports to the Governor and the Monetary Board on the risks that could affect financial system stability and makes recommendations on the measures and policies required to reduce these risks and to maintain financial system stability.
The FSC is also responsible for the preparation of the Financial System Stability Review (FSSR). The purpose of the FSR is to inform all stakeholders, including the general public of the Central Bank's overall assessment of financial system stability and potential risks and ways to mitigate them and to encourage informed debate on financial stability issues in Sri Lanka.
In addition, the FSC has released a number of publications namely a brochure on the "Objectives, Functions and Organization of the Central Bank", a " Guide to Foreign Exchange Transactions" and a series of pamphlets on "Price Stability", "Financial System Stability", "The Exchange Rate", "Danger Posed By Pyramid Schemes and Multi-level Marketing Programs", "Institutions Authorised To Accept Deposits" , "Preventing Money Laundering & Combating the Financing of Terrorism" and "LankaSecure System" towards enhancing public awareness on issues relating to financial system stability.
