Financial System Stability Committee

Financial system stability is one of the two core objectives of the Central Bank of Sri Lanka set out in the Monetary Law Act. In order to ensure coordinated effort towards fulfilling this objective, the Financial System Stability Committee (FSSC) was set up in November 2003.

The main tasks of the FSSC are to:

  • Coordinate and monitor a systemic or macro-prudential approach, which looks at broad market and economic factors/externalities that could give rise to procyclicality and systemic risk affecting the stability of domestic financial system. These market and economic factors / externalities could arise during expansionary and contractionary phases of a financial cycle and also due to interconnectedness of financial institutions or payments and settlement systems or inadequate or ill functioning payments and settlement systems.
  • Evaluate adequacy, effectiveness and overall stability of payments and settlements systems in Sri Lanka with a view to identifying potential systemic concerns and making suitable policy recommendations to mitigate risks and also for development and stability of payments, clearing and settlements systems in Sri Lanka.
  • Develop and recommend systemic risk control measures – macro prudential measures – necessary to promote financial system stability, focusing on each type of externalities as well as the payments and settlements systems within current and new laws for consideration of the Governor and the Monetary Board.

Composition of the FSSC is as follows

Chairperson

Deputy Governor in-charge of Financial Sector Regulation and Supervision

Members

Deputy Governor - in charge of Economic Policy Advisory
Deputy Governor - in charge of Capacity Building & Support 
Assistant Governor - in charge of Macroprudential Surveillance Department
Assistant Governor - in charge of Bank Supervision Department
Assistant Governor - in charge of Department of Supervision of Non-Bank Financial Institutions
Assistant Governor - in charge of Economic Research Department
Assistant Governor - in charge of Foreign Exchange Department
Assistant Governor - in charge of Payments & Settlements Department
Assistant Governor - in charge of Statistics Department
Assistant Governor - in charge of International Operations Department
Assistant Governor - in charge of Domestic Operations Department
Assistant Governor - in charge of Information Technology Department
Assistant Governor - in charge of Public Debt Department
Assistant Governor - in charge of Resolution & Enforcement Department
Assistant Governor - in charge of Legal & Compliance Department
Assistant Governor - in charge of Financial Intelligence Unit 
Director of Macroprudential Surveillance
Director of Bank Supervision
Director of Supervision of Non-Bank Financial Institutions
Director of Economic Research
Director of Foreign Exchange
Director of Payments & Settlements
Director of Information Technology
Director of Statistics
Director of International Operations
Director of Domestic Operations
Superintendent of Public Debt
Director of Resolution & Enforcement
Director of Legal & Compliance
Director of Financial Intelligence Unit

Secretary to the FSSC

Deputy Director of Macroprudential Surveillance Department

The FSSC meets as and when necessary, but at least once in three months. 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 macroprudential and microprudential indicators. The FSSC makes or endorses recommendations on the measures and policies required to reduce these risks and to maintain financial system stability and such recommendations are subsequently submitted to the Monetary Board through the relevant member departments.