Banking Supervision (October 11-January 15)
METAC continued its support to the Central Bank of Egypt (CBE). This activity focused on enhancing market discipline through public disclosures which are consistent with Basel III (Pillar 3). This pillar was designed to incentivize banks to implement sound and robust risk management. METAC’s experts held several virtual meetings with CBE senior management to explain recent changes to Basel Pillar 3 disclosure requirements, and mapped them against Egypt’s current guidelines. They identified 42 disclosure requirements (out of 80) relevant to Egypt. The CBE will undertake an internal review of the draft regulation, consult with the banking sector, and perform a Quantitative Impact Study. When the draft regulation is completed and issued, it will improve public disclosure requirements enabling market participants to access key information on a bank’s regulatory capital and risk exposures, and increase transparency in a bank’s exposure to risks and the adequacy of its regulatory capital.
Public Financial Management (October 26-November 6)
A joint METAC-FAD mission supported the Egyptian authorities in updating their draft Fiscal Risk Statement to reflect recent economic and fiscal developments, including the COVID impact, drawing on international experience to identify good practices and emerging trends. The update provides a more structured outline to discuss the main factors that may cause fiscal outcomes to differ from initial budget assumptions and forecasts, such as changes in the macroeconomic environment and the financial position of public corporations. It also summarizes the impact of the COVID crisis on public finances and the mitigation measures the authorities took. A special attention is also granted to long-term fiscal risks, such as demographics and climate change.
Revenue Administration (September 6-October 3)
METAC supported the Egyptian Tax Authority in analyzing the main causes of the accumulation of disputed tax debts, including procedural and legal reasons, and advised on actions to reduce such debts. The support included advice on improving monitoring and management of disputed tax debts, including how changes to the ETA’s procedures and practices may result in a reduction in tax debts. This support is relevant to the key tax administration elements of the Medium-Term Revenue Strategy, which Egypt’s MoF is putting together with TA from the IMF FAD.