Financial System Stability Committee

Securing financial system stability is an object of the Central Bank of Sri Lanka set out in the Central Bank of Sri Lanka Act, No. 16 of 2023. The objective is to be pursued taking into account inter-alia, the development and efficiency of the financial system. The Financial System Stability Committee (FSSC) is expected to ensure coordinated effort towards fulfilling this objective by taking a holistic view of emerging risks in the financial system.

The main role of the FSSC is to assess financial system stability related aspects highlighted by members and other stakeholders and monitor risks in the financial system, and make recommendations to the Governing Board to mitigate such risks based on technical inputs provided by members.

In fulfilling this role, the FSSC shall

(a)    assess the stability of the financial system and outlook for the financial system as a whole;

(b)    monitor systemic risks emanating from markets and economic factors including interconnectedness of financial institutions;

(c)    discuss, define and select policy measures and actions deemed necessary at any given time with the aim of strengthening and preserving financial system stability;

(d)    recommend, when warranted to the Governing Board, on policy measures and actions to support financial system stability mandate of the Central Bank of Sri Lanka. These recommendations include, in particular, macroprudential policy measures and microprudential regulatory measures with system-wide implications.

Composition of the FSSC is as follows

Chairperson

Deputy Governor in-charge of Financial System Stability

Members

Deputy Governor - in charge of Macroprudential Policy
Deputy Governor - in charge of Price Stability 
Assistant Governor - in charge of Macroprudential Surveillance Department
Assistant Governor - in charge of Bank Supervision Department
Assistant Governor - in charge of Department of Supervision of Non-Bank Financial Institutions 
Assistant Governor - in charge of Economic Research Department 
Assistant Governor - in charge of Deposit Insurance and Resolution Department
Assistant Governor - in charge of Payments & Settlements Department 

Director of Macroprudential Surveillance
Director of Bank Supervision
Director of Supervision of Non-Bank Financial Institutions
Director of Economic Research
Director of Deposit Insurance and Resolution
Director of Payments & Settlements

Secretary to the FSSC:  A Deputy Director of Macroprudential Surveillance Department

The FSSC meets at least once in two months. At these meetings, members analyse reports prepared by relevant departments on issues and concerns relating to the stability of the financial system. Risks to the financial system are detected and measured through surveillance, which include the monitoring of financial sector stability indicators, such as macroprudential and microprudential indicators. The FSSC makes or endorses recommendations on the measures and policies required to reduce these risks and to maintain financial system stability and such recommendations are subsequently submitted to the Governing Board through the relevant member departments.