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Tunisia: Averting recurrence of financial crises

Works of the first Mediterranean conference on “Financial Crises: Would they Happen Again? Understand and Reform” started Monday in Tunis.

Presiding over the gathering, Tunisia’s Central Bank (TCB) Governor Taoufik Baccar specified that the current crisis is multifaceted. Thus, he went on, it must be perceived as the contraction stage in an unprecedented world financial cycle, further magnified by the shaky nature of the international juncture.

This crisis is related to the micro-economic consequences at the level of the financial go-betweens and markets.

He underlined that the systemic character of the present world crisis required an overall thinking on the institutional and regulatory means that would contain financial crises, neutralise their spreading to the tangible sphere and clarify the contours of a new international financial architecture that is capable of curbing the system’s risks.

Hence, the G20 orientations for a new regulation of the world finance aimed to better control the sources of financial instability and avoid eruption of new systemic crises.

The point is to develop integrity of financial markets, notably by striving to broaden the sphere of regulation to include all markets and tools, as well as all areas. It also is a matter of reducing the procyclicity of the financial markets, limit the leverage effects, keep rating agencies under control, better appreciate the market risks and extend banking supervision which from now on should take into account both accuracy of stockholders’ equity and liquidity risks.

Tunisia for its part, the minister pointed out, equipped as it is with its good knowledge of the world financial markets that dates back to more than fifteen years, has been following very closely developments of this crisis and discussions on the fundamental reforms that need to be carried in order to improve, in the future, the world financial architecture and consequently avoid recurrence of crises of this kind.

.In this connection, Mr. Baccar reviewed the actions undertaken in Tunisia to guarantee greater financial stability.

TCB Governor added that the utilization of macro prudential indicators and reliance on stress tests, which are already operational in Tunisia, testify to the country’s choice to arm itself with the most advanced techniques to avert crises and measure up their impact on the financial system


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