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International Consultant to Provide Training on Methods to Conduct Systemic Risk Analysis and Assessment

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Organization Name: World Bank
Location: Mongolia
Apply email: Not Specified
Start Date: 05-October-2019
Closing Date: 15-October-2019

Mongolia - P161048 - Strengthening Fiscal and Financial Stability Project - C5/CS/010

Country: Mongolia

Project Id: P161048

Project Name: Strengthening Fiscal and Financial Stability Project

Loan/Credit/TF Info.: IDA-60850

Notice Version No.: 1

General Information

Notice Type & Request for Expression of Interest

Borrower Bid Reference: C5/CS/010

Bid Description: International consultant to provide training on methods to conduct systemic risk analysis and assessment

Language of Notice: English

Deadline for Application Submission Date: 2019/10/15

Local Time: 17:00

Selected category codes for product to be procured: 80101510-Risk management consultation service

Contact Information on Advertisement

Organization/Department: Ministry of Finance

Name: Bayarmaa Losol

Title: Procurement Specialist

Address: Government Building 2 S.Danzan street 5/1 Ulaanbaatar 15160

Country: Mongolia

Phone: 91103048

Email: procurement@sffs.mn

Website: www.sffs.mn

Detailed Information for Advertisement

REQUEST FOR EXPRESSIONS OF INTEREST - FURTHER EXTENDED

(CONSULTING SERVICES – INDIVIDUAL CONSULTANT SELECTION)

Country: MONGOLIA

Project name: STRENGTHENING FISCAL AND FINANCIAL STABILITY PROJECT

Credit No. 6084-MN; 6085-MN

Assignment title: International Consultant on developing systemic risk assessment model

A. BACKGROUND

The Government of Mongolia has received a credit from the International Development Association toward the cost of the Strengthening Fiscal and Financial Stability Project (SFFSP), and it intends to improve fiscal policy and sustainability in a mineral-based economy, protect the poor and vulnerable, and restore confidence in the financial sector. The Ministry of Finance (MOF) will be responsible for the implementation of the project, including overall coordination, results monitoring.

The Mongolian financial system is dominated by the banking sector. Banks account for about 95 percent of total financial system assets. They are highly concentrated and competition remains limited, with the top five banks accounting for 67 percent of the total financial system assets.

Mongolia’s credit growth had rapidly accelerated in 2013–2014, reaching 54 percent at the end of 2013, fueled by substantial monetary easing by the Bank of Mongolia (BOM) through a series of quasi-fiscal policy lending programs. Fresh liquidity injected by the BOM reached MNT 3.5 trillion—18 percent of GDP—at its peak at the end of 2013. As the BOM began to gradually withdraw the monetary easing program and the economy gradually slowed from mid-2014, credit conditions have substantially tightened, with bank loan growth (year-on-year) dropping from 43 percent in June 2014 to less than 2 percent at the end of 2015. With tighter credit conditions and continued slowdown of the economy, the asset quality of banks has deteriorated significantly. Formally reported nonperforming loans reached 9.1 percent of total outstanding loans in November 2016, a substantial increase from 5 percent at the end of 2014. But NPL ratio slightly decreased to 8.5 percent at end of the 2017. The banking system is still vulnerable to substantial amount of loans concentrated in the riskier sectors—such as construction, mining, and real estate.

Capital markets remain in the early stages of development and the insurance market is small, with a penetration rate of about 0.64 percent of GDP. Progress in the development of Nonbank Financial Institutions (NBFIs) is slow, and continuous efforts are needed to build appropriate institutions, policies, and oversight arrangements.

The Financial Stability Council (FSC) was established in January 2010. According to the recent amendments to the Law on the BOM, main task of the FSC is to discuss the issues related to systemic risk identification, monitoring and mitigation at the meetings, and ensure coordination between member institutions’ activities for maintaining financial stability. The Secretariat of the FSC (FSCS) was established at the BOM with 5 staffs and is a permanent unit responsible for making risk assessment of the financial system, formulating policy proposals intended to mitigate systemic risks and vulnerabilities, and preparing Mongolia’s semi-annual financial stability report.

Assessing financial stability is a complex process. The analytical framework to monitor financial stability is centered around the macroprudential surveillance and is complemented by surveillance of financial markets, analysis of macrofinancial linkages, and surveillance of macroeconomic conditions. The capacity of the Secretariat to perform financial stability assessment depends largely upon the quality and availability of the data, and development of the analytical framework. The analytical framework to monitor financial stability /systemic risk indicators, stress test, early warning system, etc./ is insufficiently developed. Thus, capacity of Secretariat’s staff to develop analytical framework of financial stability assessment needs to be improved further.

B. OBJECTIVE OF THE ASSIGNMENT

The main objective of this assignment is to strengthen the analytical capacity of the FSCS by providing with (i) training on methods to conduct systemic risk analysis and assessment and (ii) study with the aim to develop the systemic risk assessment methodology tailored to Mongolia.

C. SCOPE OF THE WORK

Duration of the contract is six months.

Key responsibilities of the International Consultant will include providing consultancy service to the staff of the Secretariat of the FSC on the following matters, but not limited to:

First on-site mission (15 days)

• Get acquainted with the current Mongolian economy and financial market structure, analytical framework with financial stability purpose;
• Review the data availability and frequency;
• Study international practice of systemic risk assessment models (including systemic risk models such as SAMP and RAMSI, macro stress test model, conventional macroeconometric models) that possibly be suitable for Mongolia;
• Based on the findings, prepare an inception report that defines systemic risk assessment approach that best suits for Mongolia;
• Get feedback on the selection of methodology;
• Perform background reading and literature survey on the proposed methodology/model;
• Carry out training on systemic risk assessment approaches and hands-on demonstrations of model-building;

Second on-site mission

15 days

• Develop the full-fledged systemic risk model tailored to Mongolia that can be used in systemic risk monitoring and policy effect analysis;
• Make the model ready for regular use, test and ensure its theoretical consistency and practical application;
• Prepare and provide a comprehensive guide for the implementation of systemic risk model for financial stability analysis of Mongolia;
• Get feedback on the guide and revise it;
• Carry out a 5-day-training/workshop on the developed systemic risk model with step-by-step demonstration and extensive applications using econometric software;
• Prepare a final report;

D. DELIVERABLES

The International Consultant shall submit the following deliverables to the BOM:

Mission & Deliverable

First mission

• Study report on international practice of systemic risk assessment models
• An inception report that defines systemic risk assessment approach that best suits for Mongolia
• Training report and supporting materials (powerpoints, handouts, case studies etc.)

Second mission

• Comprehensive guide for the implementation of systemic risk model for financial stability analysis of Mongolia (preliminary and revised version)
• Documents and files related to the model
• Training/workshop report and supporting materials (powerpoints, handouts, case studies etc.)
• Final report on the systemic risk assessment methodology tailored to Mongolia

E. CONSULTANT’S QUALIFICATIONS

To be considered eligible candidates should have all the eligibility criteria listed below:

• Education: A suitable candidate should have a post-graduate degree in Economics or Finance.
• Experience: A candidate should have at least 15 years of professional experience. Candidates who have held senior positions in the financial stability units at the central bank and/or as a financial sector supervisor would be preferred. The experience in developing full-fledged models for financial stability assessment and analysis, and in conducting comprehensive financial stability assessment/analysis will be strongly preferred.
• Language skills: Professional English in writing and speaking.
• Other skills: Excellent interpersonal skills with the ability to function effectively and collaboratively in a team environment; proficiency in PC based applications such as Word, Excel and data management, and have excellent web research and navigation skills; knowledge of web-based data system analysis is strongly preferred.

Interested consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services.

1. Cover letter indicating why she/he considers her/himself suitable for the position,

2. Detailed CV highlighting relevant skills/experience,

3. Copy of diplomas or certificates.

The consultant will be selected in accordance with the World Bank’s Procurement Regulations for IPF Borrowers (July 2016).

Expressions of interest must be delivered in a written form to the address below or by e-mail before 17:00 on October 15, 2019 (local time, Ulaanbaatar, Mongolia).

Further information can be obtained at the address below during office hours: 8:30 to 17:30 hours (local Ulaanbaatar time) or procurement@sffs.mn.

Attn: Ms.Bayarmaa L, Procurement specialist,

Project Implementation Unit

The World Bank – Strengthening fiscal and financial stability project,

Room #205, Negdsen undestnii 8/2, 4th khoroo, Chingeltei District, Ulaanbaatar, Mongolia

Tel: +976-70120582

Job Email id: procurement(at)sffs.mn