Description of the goods or services required
Support to the Central Bank of Tunisia in the adoption and implementation of IFRS in the financial sector
More remains to be done to build resilience and promote the convergence towards international standards in the financial sector in Tunisia, including the implementation of International Financial Reporting Standards (IFRS). In Tunisia, few financial institutions are currently compliant with IFRS. Recently, the country decided to undertake the transition towards IFRS by 2021. The adoption timeframe is tight and the associated costs substantial for financial sector. The Central Bank of Tunisia (CBT) is leading the transition of the financial sector towards IFRS from a prudential point of view and it has included it as a priority in its new strategic plan adopted in February 2019. CBT has specifically requested the assistance of the EBRD in the reform process. The request builds on the good collaboration to date and achievements of EBRD technical assistance provided in the past two years on the topic. Supporting the timely transition of this financial sector reform in Tunisia is also viewed by the EBRD as a priority.
The proposed technical co-operation project will provide the necessary advice, knowledge transfer and skills development to the CBT in the field of IFRS and support the measures it undertakes to align local accounting standards with international best practices. The project will support CBT in implementation of different reform phases by:
· Assessing strategic plans and roadmaps of financial institutions (FI) to enable CBT to monitor and evaluate institutions’ preparedness for the implementation of IFRS;
· Carrying out an impact study of the first application of IFRS by FIs;
· Supporting the CBT in developing a regulatory framework relating to the application of IFRS and in particular IFRS9 by FIs;
· Providing capacity building of the CBT on technical aspects related to the first adoption of the IFRS and implementation of IFRS9 (inclduing supervisory monitoring manual, specific reporting templates, assistance in the interpretation and analysis of results);
· Preparing reports for the ad-hoc committee (established for the strategic coordination of the IFRS reform between the various stakeholders) as well as internal and external communication relating to the assignment.
The project is expected to increase transparency, accountability and efficiency of Tunisian financial institutions, thereby contributing to increasing confidence in the Tunisian financial sector and financial stability in the long-term.
The project is complementary to technical assistance provided by other IFIs: the World Bank is supporting three authorities (Ministry of Finance, Autorité de Contrôle de la Microfinance and Comité Général des Assurances) on IFRS implementation and the IMF is working with the CBT on prudential reforms aimed at convergence towards Basel III standards by 2021, respectively. EBRD has already established communication channels with both IFIs for close coordination and to maximize synergies and impact.
The Bank now intends to engage a consultant (the “Consultant”) in order to support the CBT in the adoption and implementation of IFRS in the banking sector. In order to achieve the objectives of the assignment, the Consutlant will:
· Provide information on the regulatory and operational frameworks adopted by comparator countries (central banks and/or prudential supervisors) for the application of IFRS 9 , which are pertinent to the Tunisian case and whose experience can be drawn upon;
· Review and evaluate the implementation of IFRS by Tunisian Financial Institutions, FIs: (i) assessment of strategic plans and roadmaps prepared by the FIs, (ii) review the adequacy of policies, procedures, risk management framework, governance and internal control system of FIs with regard to the application of IFRS and (iii) carry out a first macro impact study of the adoption of IFRS on the financial situation and equity of FIs;
· Undertake an impact assessment of the implementation of IFRS 9, including determining the methodology, data and information required and analsyis of the impact of the application of IFRS 9 on the financial situation and the solvency ratios of FI;
· Support the CBT in the design of a regulatory framework relating to the application of the IFRS and in particular IFRS 9 (including recast and updates of certain circulars and a methodology guide) ;
· Review of the first application of IFRS by FIs and examination of the main shortcomings;
· Provide support to the CBT project team on the technical aspects after the first adoption of the IFRS and the implementation of IFRS 9: (i) design a supervisory monitoring manual, (ii) design specific reporting templates to be used by FIs to the CBT related to IFRS ; (iii) provide assistance to the CBT project team in the interpretation and analysis of the results of the application of IFRS 9, particularly in terms of validation of the models for calculating the expected credit loss and the internal rating system;
· Provide tailored capacity building to CBT staff through transfer of knowledge and skills (identify the gaps in knowledge and skills of the staff involved in the supervision of FIs with a view to implementing IFRS standards and in particular IFRS 9; deliver a tailored training program to meet the relevant staff’s training needs, covering the technical aspects related to the implementation of IFRS 9, in particular in terms of impairments, monitoring and validation of models);
· Support the CBT project team in the coordination of the ad-hoc Committee (including preparation of reports as well as internal and external communication relating to the project).