Mongolia: Policy and Institutional Support for Banking Sector Systemic Risk Management

Sovereign Project | 43246-012


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Project Name Policy and Institutional Support for Banking Sector Systemic Risk Management
Project Number 43246-012
Country Mongolia
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7397-MON: Policy and Institutional Support for Banking Sector Systemic Risk Management
Japan Special Fund US$ 2.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Finance - Banking systems and nonbank financial institutions

Gender Equity and Mainstreaming
Project Rationale and Linkage to Country/Regional Strategy
Impact Stronger and broaderbased economic recovery supported by a healthy banking sector.
Project Outcome
Description of Outcome A conducive and prudent policy and operating framework for systemic risk management for the banking sector and distressed assets resolution in place.
Progress Toward Outcome Overall progress is on track to complete by 31 October 2014.
Implementation Progress
Description of Project Outputs

1. BOM and Government leadership, authority, and capacity in systemic risk management of banking sector


3. Corporate governance structures and internal controls of commercial banks strengthened

4. A multifaceted approach for NPL resolution established, including asset management companies (AMCs)

5. Policy-related knowledge products geared to senior policy and decision makers.

6. Project management

2. Financial safety net to ensure the financial sector stability strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)

During the review mission on 16-20 September 2013, the mission and EA agreed to various priorities and the timings for the remaining unfilled consultant positions.

Additional discussion was held and agreement made on the continued work for the exisiting consultants due to the recent extension approval for the TA through 31 October 2014.

The following are the achievements based on the project outputs:

1. A report was issued concerning preliminary recommednations on macro-prudential supervision and the financial stability safety-net.

2. The Deposit Insurance Corporation of Mongolia began operation in July 2013 based on operational inputs from consultants in deposit insurance and payouts.

3. The corporate governance framework for MongolBank was revised and approved and industry-wide training was held with the Corporate Governance Development Centre to promote the topic. A summary report was issued to the BOM regarding corporate governance, related party transactions, and large exposures.

Priority has been on filling the remaining unfilled consultant positions. The result has been the successful sourcing of consultants for consolidated supervision, the DSGE modeling, and internal controls. With these recruitments, all key positions have been filled and no further recruitment is expected before the end of the project on 31 October 2014. Work regarding NPL management has ended earlier than planned in December 2013 resulting in a budget savings. An extension of additional workdays for the DICOM consultants and that for macro-prudential issues was approved in December and work in these areas continues. Ongoing work to assist with the implementation of new accounting standards that are consistent with IFRS also continues.

Recruitment for the expert in DSGE modelling was completed and work has begun. Work has begun on a consolidated supervision framework.

Geographical Location Mongolia
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The Bank of Mongolia was actively involved in project preparation.
During Project Implementation Regular consultation with the Bank of Mongolia during review missions.
Business Opportunities
Consulting Services The project will use a mix of individual consultants and consulting firms, with more complex assignments being given to consulting firms to facilitate coordination of the inputs of the various experts.
Responsible ADB Officer Giacomo Giannetto
Responsible ADB Department East Asia Department
Responsible ADB Division Public Mgt, Financial Sector and Regional Coop Division, EARD
Executing Agencies
Mongol Bank
Mr. B. Lkhagvasuren
October Street 6
Concept Clearance 10 Aug 2009
Fact Finding 29 Jul 2009 to 04 Aug 2009
Approval 27 Nov 2009
Last Review Mission -
PDS Creation Date 16 Jan 2010
Last PDS Update 29 Sep 2014

TA 7397-MON

Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2009 25 Dec 2009 25 Dec 2009 31 Dec 2012 31 Oct 2014 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
2,000,000.00 0.00 300,000.00 0.00 0.00 0.00 2,300,000.00 27 Nov 2009 1,692,534.34

Safeguard Documents

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Evaluation Documents

See also: Independent Evaluation

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