The proposal endorsed by the finance ministry has now been forwarded to the Ministry of General Administration, a senior official of the finance ministry told Republica on condition of anonymity. [break]“Once the ministry gives a green signal, the proposal would be sent to the Council of Ministers for final approval,” the official said.
The finance ministry has been mulling over splitting the Economic Operations and Policy Analysis Division into two for couple of years, as workload on the unit was piling up due to rise in the number of financial institutions and risks generated by sophistication in the economy.
At the same time, the division was also not being able to devote more time on research, which was affecting works related to policy formation and decision making.
Once the division is separated, the Economic Policy Analysis Division would entirely focus on research-oriented works and data analysis based on which projections on the economy and financial sector would be made.
“This division will also look over the debt market, make projections on domestic debt demand, prepare guideline for international financial institutions to raise debt in domestic currency and oversee all works related to domestic and foreign debt management until formation of the Debt Management Office,” the official said. “In addition, the work that is being conducted by revenue advisory committee will also be transferred to Economic Policy Analysis Division.”
The Financial Sector Management Division, on the other hand, will focus on regulatory works and create policies for the financial sector, including financial institutions and the securities market.
Lately, growth of banks and financial institutions, number of which has reached close to 200, cooperatives involved in savings and credit activities, merchant banks and lately commodities and derivatives exchanges have not only increased the burden on the ministry but has also raised risks on the economy.
“Their activities need to be watched carefully in cooperation with regulatory bodies that are currently monitoring activities of these companies,” the official said. “The Financial Sector Management Division will particularly look over these issues.”
Although who will lead these two divisions is yet to be finalized, the finance ministry has said each of the division will be headed by a joint secretary. “The Economic Policy Analysis Division will further employ three under secretaries, while Financial Sector Management Division will have two under secretaries,” the official said.
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