Financial Reporting, Accountability and Independence in Central Banking 2022

Financial Reporting, Accountability and Independence in Central Banking

Financial Reporting, Accountability and Independence in Central Banking

May 23 – 26

Live Content sessions held: 9am–1pm (EDT) | 2pm–6pm (BST) | 9pm–1am (SGT) 

Chair: Kenneth Sullivan, director, Sullivan Consulting and former senior financial expert, International Monetary Fund

Central bank balance sheets are in flux. Externally, the dislocation of the Covid pandemic has been followed by the global inflationary surge and, in 2022, the strains of the Russia-Ukraine conflict. Internally, central banks are changing. The use of technology grows rapidly, notably with central bank digital currencies (CBDC). Central banks increasingly embrace environmental, social and governance (ESG) issues, in all aspects of policy and operations.

This era of change will place new demands on financial resources, expose the institution to new risks, and create new expectations among stakeholders.

For those charged with overseeing their central bank’s balance sheet, the impact will be felt for years to come.

This course is designed to equip central bankers to meet these challenges. Each day will feature three hours of expert-led Live Content to maximise the opportunity to share and learn. The chair will ensure participants have opportunities to network throughout the course, culminating in a workshop on practical implementation.

Read the letter from our course chair.

Agenda

Two weeks prior to your training course you will be emailed access to our content hub with course materials, including a trial to Central Banking if you are not already subscribed. There will be a combination of articles, reports and presentations that will contribute to two hours of preparation time for the live content. Presentations for the sessions will also be held here subject to the speaker approval.

New dynamics shaping central bank balance sheets

14:0014:30

Course introduction
Course introduction session led by the chair

14:00 - 14:30

  • Introductions and welcome from the chairperson
  • Overview of the training course
  • Discussion of the delegate expectations
Kenneth Sullivan

Sullivan Consulting

Director

Kenneth Sullivan's central banking career is built around periods as a senior financial sector expert with the International Monetary Fund and seven years at the Reserve Bank of New Zealand as chief manager of both accounting and corporate services. During his tenure the RBNZ developed new reporting frameworks that won accounting prizes for their transparency and completed a fundamental reorganisation of the bank. Prior to that he provided a financial management information system consultancy, held senior accounting roles in insurance and wholesaling, and worked in education. He has written on issues of central bank financial reporting, capital adequacy, organisation and accountability. 2014 saw publication of the book Financial Independence and Accountability for Central Banks that he edited with Martina Horakova of Central Bank Publications. Whilst at the IMF he represented the IMF on the International Financial Reporting Standards Advisory Council for 7 years and provided advice to over 90 central banks along with a secondment to a London bank working on structured finance.

14:3015:30

Legal frameworks under a multi-mandate environment

14:30 - 15:30

  • The expanding mandates and evolving governance structure of central banks
  • Comparative analysis of developments in selected countries
  • Discussion: how to manage the potential policy conflicts and increased scrutiny of central banks actions due to expanding mandates
Atilla Arda

Senior financial sector expert

International Monetary Fund

Atilla Arda is a Senior Financial Sector Expert in the International Monetary Fund’s (IMF) Monetary and Capital Markets Department; prior to this, he was a Senior Counsel in the IMF’s Financial & Fiscal Law Unit. Mr. Arda joined the IMF in February 2007 from the central bank of the Netherlands where he held a Senior Counsel position and was Substitute Secretary to the Board; he also contributed to the workings of the Legal Committee of the European System of Central Banks. Mr. Arda has consulted for over 70 countries, half of which on-site, including for countries as diverse as Egypt, Greece, Indonesia, Ireland, Jamaica, Kosovo, Myanmar, Portugal, Sri Lanka, and Ukraine. Most recently, he was the deputy head for the Switzerland Financial Sector Assessment Program (FSAP), and he led the FSAP crisis readiness teams for the United Kingdom, United States, and euro area. Mr. Arda is specialized in central bank governance and law, financial law, institutional frameworks for macroprudential policy and crisis management, financial safety net arrangements, crisis preparedness, and bank resolution regimes. Mr. Arda undertook his undergraduate at the Amsterdam Academy of Banking and Finance; he is a graduate of both the Amsterdam Law School and the Amsterdam Graduate School of Law of the University of Amsterdam, where he specialized in international economic and financial law. He is a regular speaker at international conferences and has been chairing Central Banking Publications’ course on ‘Central Bank Governance and Legal Risks’ since 2014.

15:3015:45

Break

15:30 - 15:45

15:4516:45

The reality of central banking under a multi-mandate framework

16:45 - 17:45

  • The key issues facing financial reporting in the modern central bank
  • Operational challenges central banks face in adapting to the new environment
  • Implications for balance sheets, contingent liabilities and shareholder relations
  • Discussion: impact of Covid-19 measures on balance sheets in participants’ home jurisdictions
Marko Škreb

Former governor

Croatian National Bank

Marko Škreb is a former governor of the Croatian National Bank. Currently he is Central banking lead on a Financial sector reform project (FINRA) in Bosnia and Herzegovina, financed by USAID. Before that he was resident project manager for Canada-IMF Capacity building project at the National Bank of Ukraine. He moved to Kyiv from his position as advisor at the International Monetary Fund’s Regional Technical Assistance centre in Accra, Ghana.  Before that, he was chief economist and strategist at the second largest commercial bank in Croatia. Mr. Skreb started his professional career teaching at the University of Zagreb. Following academic vocation he joined the Croatian central bank, first as research and statistics director and later on as governor (from 1996 to 2000). In 1997 he was awarded the Central European Annual Awards for Excellence - Best Central Bank Governor by the Banker. Since 2000 he worked as a consultant for the International Monetary Fund and the World Bank in numerous countries, mostly in South-East Europe. He also worked at the Independent Evaluation Office of the IMF in Washington DC in the period 2004-2005. Mr Škreb published a number of articles and edited books, focusing on transition questions and financial issues.

16:4517:00

Break

16:45 - 17:00

17:0018:00

CBDCs: how will they shape central banks?

17:00 - 18:00

  • What are the models for CBDCs and how would they work?
  • What are the opportunities and risks for central banks and the banking system?
  • Discussion: lessons from CBDC projects?
John Kiff

Former senior financial expert

Former International Monetary Fund

From 2005 to 2021 John Kiff was a Senior Financial Sector Expert at the International Monetary Fund (IMF). Prior to that, he was at the Bank of Canada for 25 years, where he spent most of his time managing the funding and investment of the government’s foreign exchange reserves, including running its interest rate and currency swap book. At the IMF he was part of the team that produces the semi-annual Global Financial Stability Report covering innovative financial products. More recently he has been focusing on fintech issues and central bank digital currency.

Good practice financial reporting frameworks, tools and value add

14:0015:00

Specific accounting and reporting challenges facing central banks

15:15 - 16:15

  • Appropriate central bank reporting framework
  • Specific challenges in IFRS and central bank responses
  • Accounting policies to best match policy performance
  • Discussion: How financial statements can add value
Robin Darbyshire

Former financial accountant at Bank of England

Robin Darbyshire is a chartered accountant who has worked, as an independent consultant for 10 years, mainly on central bank issues. He has undertaken a number of projects for the International Monetary Fund, including implementation of International Financial Reporting Standards (IFRS) in central banks. He has also worked on a payments system at a middle eastern central bank. Previously he spent 19 years with the Bank of England, for 17 of which he was responsible for the Bank’s accounts. He was a founder member of the committee that devised the accounting framework and policies for the European System of Central Banks and has recently undertaken projects for the European Central Bank related to Eurosystem accounting. He has written a number of articles on issues in central bank accounting and regularly speaks at conferences on central bank finances.

15:0015:15

Break

15:00 - 15:15

15:1516:15

European Central Bank reporting framework

14:00 - 15:00

  • ESCB Accounting Guidelines and Financial reporting framework
  • Origins and environment for ESCB accounting
  • Outline of key accounting concepts
  • Role of provisions, reserves and distributions in ESCB framework
  • Financial statements and reporting financial performance
  • Accounting challenges going forward
Robin Darbyshire

Former financial accountant at Bank of England

Robin Darbyshire is a chartered accountant who has worked, as an independent consultant for 10 years, mainly on central bank issues. He has undertaken a number of projects for the International Monetary Fund, including implementation of International Financial Reporting Standards (IFRS) in central banks. He has also worked on a payments system at a middle eastern central bank. Previously he spent 19 years with the Bank of England, for 17 of which he was responsible for the Bank’s accounts. He was a founder member of the committee that devised the accounting framework and policies for the European System of Central Banks and has recently undertaken projects for the European Central Bank related to Eurosystem accounting. He has written a number of articles on issues in central bank accounting and regularly speaks at conferences on central bank finances.

16:1516:45

Networking break
An opportunity to share experiences with your fellow participants.

16:15 - 16:45

16:4517:45

Protecting policy solvency: the question of capital structures

16:45 - 17:45

  • Evaluating the relationship between a central bank's capital arrangements and its functions
  • Overview of models of profit and loss sharing across central banking
  • The impact of Covid-19 measures on central bank balance sheet and results
  • How can capital arrangements be improved in participants’ home institutions?
Kenneth Sullivan

Sullivan Consulting

Director

Kenneth Sullivan's central banking career is built around periods as a senior financial sector expert with the International Monetary Fund and seven years at the Reserve Bank of New Zealand as chief manager of both accounting and corporate services. During his tenure the RBNZ developed new reporting frameworks that won accounting prizes for their transparency and completed a fundamental reorganisation of the bank. Prior to that he provided a financial management information system consultancy, held senior accounting roles in insurance and wholesaling, and worked in education. He has written on issues of central bank financial reporting, capital adequacy, organisation and accountability. 2014 saw publication of the book Financial Independence and Accountability for Central Banks that he edited with Martina Horakova of Central Bank Publications. Whilst at the IMF he represented the IMF on the International Financial Reporting Standards Advisory Council for 7 years and provided advice to over 90 central banks along with a secondment to a London bank working on structured finance.

Strengthening accountability: stakeholder engagement and assurance

14:0015:00

Central bank profit (and loss) sharing models

14:00 - 15:00

  • Evaluating the relationship between a central bank's capital arrangements and its functions
  • Considerations for determining profit distribution models
  • Overview of models of profit and loss sharing across central banking
  • Considerations for future arrangements
Kenneth Sullivan

Sullivan Consulting

Director

Kenneth Sullivan's central banking career is built around periods as a senior financial sector expert with the International Monetary Fund and seven years at the Reserve Bank of New Zealand as chief manager of both accounting and corporate services. During his tenure the RBNZ developed new reporting frameworks that won accounting prizes for their transparency and completed a fundamental reorganisation of the bank. Prior to that he provided a financial management information system consultancy, held senior accounting roles in insurance and wholesaling, and worked in education. He has written on issues of central bank financial reporting, capital adequacy, organisation and accountability. 2014 saw publication of the book Financial Independence and Accountability for Central Banks that he edited with Martina Horakova of Central Bank Publications. Whilst at the IMF he represented the IMF on the International Financial Reporting Standards Advisory Council for 7 years and provided advice to over 90 central banks along with a secondment to a London bank working on structured finance.

15:0015:15

Break

15:00 - 15:15

15:1516:15

Understanding and managing operational and financial risks in a central bank governance framework

15:15 - 16:15

  • Components of central bank governance
  • Identifying the key risks a central bank face 
  • Overall risk management framework 
  • Ensuring effective co-ordination within the risk functions
  • Understanding the implications of risk management for the quality of governance
  • Addressing operational and financial risks 
Christian Durand

Former deputy comptroller general

Banque de France

Currently an international consultant in central banking and financial sector issues, Christian Durand was until 2018 deputy comptroller general of Banque de France, with direct reporting to the governor. His domain of responsibility included the audit function, operational risks and on-site inspections conducted by French examiners at the request of the Single Supervisory Mechanism (SSM) or the French banking supervision authority.  Before that, he was deputy director general for economics and international affairs at the Banque de France, and in this context was a member of Banque de France Monetary and Financial Stability Policy Committees and regularly attended CGFS meetings at the BIS. During his career, Mr. Durand has held senior positions with the International Monetary Fund’s Monetary and Capital Markets Department, the French Banking Supervisory Authority and the French Securities and Futures Commission and led negotiations ending with the signing of MOUs with the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). He has also worked extensively with financial institutions in France and other organizations, including the New York Federal Reserve Bank, the International Organization of Securities Commissions (IOSCO), FIRST initiative and the AFRITAC project. Through his different assignments he has developed a professional experience in central banking, international economics, financial supervision and financial sector development and stability issues. He has conducted or supervised the implementation of several technical assistance projects for the EU, the IMF or the Banque de France and led, for the IMF FSAP program, financial stability assessment missions in a wide range of countries starting with Cameroon in 1999 and ending with the United States in 2010. His academic education is in economics (thesis on “the concept of money in the controversies on capital, interest and fluctuations in the early thirties”), finance and law. 

16:1516:45

Networking break
An opportunity to share experiences with your fellow participants.

16:15 - 16:45

16:4517:45

Aligning resource use with mandates: functional reporting for a central bank

16:45 - 17:45

  • Reporting by function vs reporting by department: a comparison
  • Strategies for an effective functional reporting
  • Implications for transparency and interdepartmental cooperation
  • Case study: how to report the costs (and income) by function
Henrik Gardholm

Head of accounting division

Sveriges Riksbank

Henrik Gardholm is the head of the Accounting Division of the Sveriges Riksbank, which is responsible for the central bank’s financial reporting and budgeting. He is also a member of the Accounting and Monetary Income Committee at the European Central Bank (ECB). Mr. Gardholm joined Sveriges Riksbank in April 1998, in a role responsible for financial reporting. He was then promoted to his current position in February 2006. Prior to joining Sveriges Riksbank, he was an internal auditor at a commercial bank called Nordea as well as an authorised public accountant at KPMG.

Safeguarding independence

14:0015:00

Audit: a cornerstone of governance

14:00 - 15:00

  • Central bank audit: a 21st century audit for a 21st century institution
  • Communication: how should central bank finance and other departments communicate with external audit
  • Financial Reporting and disclosures: what criteria the auditors use to assess the appropriateness of the reporting frameworks and accounting policies
  • Strategies to deal with the challenges of the audit process at central banks
Jeremy Foster

former Financial Services Capital Markets Partner

PwC

Jeremy spent many years as a financial services partner with PwC, auditing and advising central banks in Asia, Africa, Europe and the former Soviet Union. He was founder and chair of the PwC Central Bank Advisory Group, working with central banks on financial reporting, risk, controls and governance. He recognises that central banks are unique institutions, and therefore, in addition to strong financial services knowledge, they require additional special skills in an auditor and adviser. He currently works as an adviser to PwC Switzerland on their audit of the BIS.

15:0015:15

Break

15:00 - 15:15

15:1516:15

Oversight and accountability: an effective framework for co-operation

15:15 - 16:15

  • How do accountants work effectively with the board?
  • What are the needs of the board and how can they encouraged to be an effective part of financial reporting?
  • Understanding independence: how can those in financial reporting help the board maintain its independence
  • Discussion: practical examples from delegates home jurisdictions
Daniel Loeto

Chief financial officer

Bank of Botswana

Daniel N Loeto is Chief Financial Officer and Head of Finance Department, Bank of Botswana.  He holds a Bachelor of Science (Mathematics and Physics) and a Master of Business Administration.  He is a fellow of the Association of Chartered Certified Accountants (ACCA).

Mr Loeto currently sits on the board of Botswana Accountancy Oversight Authority (2011 to date): - a body responsible for the regulation of auditors and financial reporting in Botswana, has been a member of the Botswana Unified Revenue Service Board (tax authority) from 2004 to 2013.  He has served as a member of the International Monetary Fund’s External Audit Committee for three years (2014 – 2016).  Did an executive development- programme at the University of Cape Town’s Graduate School of Business (2005) and an advanced management programme at the Kellogg School of Management (Northwestern University) in 2017.

16:1516:30

Break

16:15 - 16:30

16:3017:15

Closing remarks and delegate action plans
Concluding session led by the chair

16:30 - 17:15

  • Summary of the course
  • Discussion of the observed trends and case studies
  • Application of learning points in the delegates’ home organisations
  • Preparation of action points
Kenneth Sullivan

Sullivan Consulting

Director

Kenneth Sullivan's central banking career is built around periods as a senior financial sector expert with the International Monetary Fund and seven years at the Reserve Bank of New Zealand as chief manager of both accounting and corporate services. During his tenure the RBNZ developed new reporting frameworks that won accounting prizes for their transparency and completed a fundamental reorganisation of the bank. Prior to that he provided a financial management information system consultancy, held senior accounting roles in insurance and wholesaling, and worked in education. He has written on issues of central bank financial reporting, capital adequacy, organisation and accountability. 2014 saw publication of the book Financial Independence and Accountability for Central Banks that he edited with Martina Horakova of Central Bank Publications. Whilst at the IMF he represented the IMF on the International Financial Reporting Standards Advisory Council for 7 years and provided advice to over 90 central banks along with a secondment to a London bank working on structured finance.

Learning outcomes

At the conclusion of the training, participants will be able to:

  • Analyse the impact of the pandemic on central bank balance sheets
  • Understand the implications of CBDC and ESG for financial reporting
  • Gain insights into how the central bank and sovereign risk profiles are changing
  • Understand how to tackle the financial reporting challenges of a multi-mandate environment
  • Assess the impact of recent changes in accounting standards and practices

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Kenneth Sullivan

Sullivan Consulting

Director

Kenneth Sullivan's central banking career is built around periods as a senior financial sector expert with the International Monetary Fund and seven years at the Reserve Bank of New Zealand as chief manager of both accounting and corporate services. During his tenure the RBNZ developed new reporting frameworks that won accounting prizes for their transparency and completed a fundamental reorganisation of the bank. Prior to that he provided a financial management information system consultancy, held senior accounting roles in insurance and wholesaling, and worked in education. He has written on issues of central bank financial reporting, capital adequacy, organisation and accountability. 2014 saw publication of the book Financial Independence and Accountability for Central Banks that he edited with Martina Horakova of Central Bank Publications. Whilst at the IMF he represented the IMF on the International Financial Reporting Standards Advisory Council for 7 years and provided advice to over 90 central banks along with a secondment to a London bank working on structured finance.