The Triple Threat | Article on Global Resession | Harsh Kumar
AFI CEMC WG - second meeting - presentation SdC
1. The 2011 AFI Global Policy Forum
Consumer Empowerment and Market Conduct (CEMC)
working group meeting
27 September, Riviera Maya, Mexico
2. The CEMC WG from Malaysia to Mexico
> 18 member organizations > Charter and concept note drafted
established CEMC WG > Survey undertaken
> Set objective > Coordination group functioning
> Identified 4 priority areas > 18 member organizations
> Agreed on content for charter and represented in the second meeting
concept note > CEMC is activated
> Agreed to undertake member survey > The CEMC WG has a logo
> Set up coordination group > and a work space: AFI Member Zone
> Agreed on content for work plan
Launch: KL, 7 April 2011 Second meeting: RM, 27 Sept 2011
3. 28 AFI members represented in the CEMC WG
> Banco Central del Paraguay > Central Bank of Tanzania
> Banco Central do Brasil > CNBV, Mexico
> Banco Nacional de Angola > Ministère de l’Economie et des Finances du
> Bank al-Maghrib Senegal
> Bangko Sentral ng Pilipinas > Ministry of Economic Development and
> BCEAO Trade, Russia
> Bank Indonesia > National Bank of Rwanda
> Bank Negara Malaysia > National Credit Regulator, South Africa
> Bank of Thailand > Palestine Monetary Authority
> Bank of Uganda > People’s Bank of China
> Bank of Zambia > Reserve Bank of Malawi
> Banque Centrale de la Rép. de Guinée > State Bank of Pakistan
> Banque Centrale du Congo > Superintendencia de Peru
> Central Bank of Armenia > Superintendencia de Guatemala
> Central Bank of Kenya
> Central Bank of Liberia
New members in yellow/green
4. Agenda
Time Item for discussion
Welcoming remarks and meeting kick-off
Review of the agenda and meeting goals
9.00 – 9.30
Review of preparatory documents
Updating each other on country initiatives
CEMC WG members survey
9.30 – 10.30
Presentation and discussion of intermediate results of the CEMC WG survey
10.30 – 11.00 Coffee break
The G20 High-level Principles on Financial Consumer Protection and their implementation
11.00 - 12.00 Discussion of impact of the Principles on the work of the CEMC WG members and the possible role of the CEMC in
their implementation
Governance
Election of CEMC WG chairperson (and eventually a co-chair)
12.00 – 12.30
Announcement of new chairperson
Discussion and approval of CEMC WG seminal documents (concept note and charter)
Presentation of CEMC WG sessions at 2011 AFI GPF
12.30 – 12.45
Relevance of the sessions and role of CEMC WG members
12.45 – 14.00 Lunch
Agenda setting and operazionalization
Presentation of proposed log-frame
14.00 – 15.00
Discussion of the CEMC WG expected outcomes and outputs
Creation of subgroups
14.00 – 15.45 Sub-groups discussions
15.45 – 16.00 Coffee break
Next steps
Finalization of log-frame
16.00 – 17.00
Finalization of work plan (division of labor between subgroups, participation in relevant events, etc.)
Agenda and logistic for the next meeting
Closing
5. Priority areas
MARKET CONDUCT
> i) transparency and disclosure
> ii) sales and marketing practices
CONSUMER EMPOWERMENT
> iii) avenues for help and redress
> iv) financial literacy, capability and awareness
6. CEMC WG’s objectives
> To promote the adoption of evidence based policy and regulatory
solutions for the empowerment and protection of financial
consumers, which is also correlated with improving access to finance
and the quality of financial inclusion
> To develop a set of core principles/guidelines for financial consumer
empowerment and protection policymaking
> To support the design and validation of tools for policy analysis and
policymaking for use by working group members
7. Meeting goals
> To present the preliminary results of the members’ survey and agree
on the next steps
> To discuss the potential role in the implementation of the G20
Principles
> To elect the chairperson
> To approve the charter and concept note
> To find agreement on the expected outcome and outputs
> To establish subgroups
> To design the CEMC WG’s log-frame
> To revise the work plan
8. Preparatory documents
> First meeting minutes and list of participants
> Second meeting agenda
> Second meeting participants list
> Consolidated results of CEMC WG survey
> Draft CEMC WG concept note
> Draft CEC WG charter
> Draft G20 High-level principles on financial consumer protection
9. Members’ update
> Central Bank of Uganda visited Mexico and Peru and released new
National Framework on Financial Literacy and Financial Consumer
Protection
> Koid Swee Lian, AFI Policy Champion and CEMC WG founder, appointed
CEO of the Malaysia AKPK
> Others?
10. Session I
CEMC WG members survey
Preliminary results
> Scope of the analysis
> Survey objectives
> Respondent demographics
> Preliminary results and observations
> Survey trends
> Roadmap to good policy practices
11. CEMC WG survey: scope of the analysis
Good
Gather policy
respective
market data practices
Self-diagnose
priority Measure impact
policy of policies and
objectives regulations on
market and
consumers
Survey peers to determine
common practices and
challenges
12. CEMC WG survey: objectives
> To gain a better understanding of WG members experiences, current
plans, and challenges ahead related to the WG’s four priority areas
> To provide a foundation from which WG members can self-diagnose
their respective policy approaches, to determine how to best enable
safe and sustainable policy and regulatory frameworks for financial
inclusion
> To inform the development of a road map towards good policy
practice for consumer empowerment and market conduct
13. CEMC WG survey: respondents demographics
Angola
BCEAO 17
RD Congo countries
Africa Kenya
Malawi
Senegal
Uganda
11 3 3
Zambia
Guatemala 17 central banks ministries
banks regulators
MexicoTotal
LAC
Paraguay
Peru
MENA Palestine
Armenia
2 billion
China people
ECA Philippines
Russia
14. NUMBER OF AGENCIES WITH RESPONSIBILITY
CEMC WG survey: demographics
> 45 (average 2.6 per country)
> Mostly central banks and ministries, but also capital market
authorities, insurance authorities, consumer protection agencies, and
few microfinance authorities
Responding Country Agency 1 Agency 2 Agency 3 Agency 4
Angola Instituto Nacional de Defesa do Consumidor Banco Nacional de Angola
(INADEC)
China State Administration for Industry
&Commerce
DR Congo Banque Centrale du Congo
Guatemala Dirección de protección al consumidor
(Ministerio de Economía)
Kenya Central Bank of Kenya Capital Markets Authority Retirement Benefits Authority Insurance Regulatory Authority
Malawi Reserve Bank of Malawi
Mexico Central Bank (BANCO DE MEXICO) National Banking and Securities Commission National Commission for the Protection of Insurance and Surety National Commission
(CNBV) Users of Financial Services (CONDUSEF) (CNSF) / Institute for the Protection of
Banking Savings (IPAB)
Palestine Palestine Monetary Authority
Paraguay Banco Central del Paraguay Instituto Nacional de Cooperativismo Ministerio de Industria y Comercio
Peru Department of Products and Services to National Institute for the Defense of Financial Ombudsman Service
Competition and Intellectual Property
Protection (Indecopi)
Philippines Bangko Sentral ng Pilipinas Securities and Exchange Commission Philippine Deposit Insurance Corporation Insurance Commission
Republic of Central Bank of Armenia
Armenia
Russian Federal Service on Consumers' Rights Ministry of Finance of the Russian Federation Ministry for Economic Development of the Federal Financial Markets Service
Russian Federation
Federation
Senegal Direction de la Réglementation et de la Direction de la microfinance (DMF) Banque Centrale des Etats de l'Afrique de Observatoire de la Qualité des Services
supervision des systèmes financiers l'Ouest (BCEAO) Financiers (OQSF)
décentralisés (DRS-SFD)
Uganda Bank of Uganda Capital Markets Authority Uganda Insurance Commission Ministry of Finance, Planning and Economic
Development, Department of Microfinance
WAEMU - UEMOA Central Bank of West African States (BCEAO) Banking Commission Microfinance Departments of Ministers of
Finances
Zambia Bank of Zambia Pensions and Insurance Authority Securities and Exchange Commission Competition and Consumer Protection
Commission
15. CEMC WG survey: categories
INSTITUTIONAL LANDSCAPE
> Mandate
> Interagency coordination
> Consultative approach
MARKET CONDUCT
> Regulation
> Oversight
> Remedial actions
> Enforcement
> Self-regulation
> Transparency and disclosure
> Sale and market practices
> Ancillary areas
CONSUMER EMPOWERMENT
> Avenues for help and redress
> Financial literacy, capability and awareness
16. MANDATE – MARKET CONDUCT
What are the main functions of the agencies?
Most commonly, the involved
agencies cover the three
functions: regulating,
supervising, and enforcing
market conduct regulation
Often the legal basis is the
central bank law and the
banking law. In a few cases the
mandate is embedded in the
constitution
17. MANDATE – CONSUMER EMPOWERMENT
What are the main functions of the agencies?
Agencies answer consumer
queries and often play a role in
delivering programs to increase
consumer’s awareness. Debt
counseling is commonly left to
specific agencies.
18. PARTICIPATIVE APPROACH
Do advocacy groups have a formal role?
Consumer advocacy organisations
play a fairly limited role in the
In designing
and
policymaking and regulatory process.
implementing In nearly 50% of the countries,
consumer consultation with consumer advocacy
empowerment
policies and groups play no role.
market
conduct regs
Only in two countries the advocacy
groups have a further role helping
consumers to file complains.
In less than 30% of the countries they
Financial have any formal roles,
education
responsibilities, or duties related to
consumer education
19. LANDSCAPE
The two main weaknesses and priorities over the next year
The assessed primary weaknesses in
the financial sector are
overwhelmingly:
- the limited access to (formal)
financial products; and
- the low level of financial literacy.
This doesn't imply that each area not flagged
by a country is necessarily fully satisfactory.
In terms of priorities, the dominant
priority is to increase financial
literacy. The second is to increase
protection for bank clients (only ½
the level of support as for financial
literacy).
20. MARKET CONDUCT – LEGAL BASIS
What legal documents govern market conduct regulation?
Relevant legal provisions are
most often found in either general
consumer protection legislation or in
financial sector regulations.
Combining these answers with other
questions, likely other legal acts (on
payment systems, credit bureaus,
insurance, pensions, and securities)
may include market conduct
Market conduct provisions are provisions; and these laws often
diffused in multiple laws. contain conflicting provisions.
Most countries do not have
specific legislation for financial
consumer protection.
21. MARKET CONDUCT
Which products and providers are covered?
Formal lenders and deposit
takers are likely to be
regulated.
Not the market of mobile
financial services. Why?
Hypothesis:
a) it’s less risky
b) it’s too new – there is no
sectoral regulation
22. MARKET CONDUCT
Which areas are covered?
The focus of market conduct
regulations is on disclosure of
the cost of financial services.
A minority of countries also
provide for complaints handling
and redress mechanisms and
for disclosure in advertising.
However, almost all areas are covered, so there are a
number of members from whom lessons can potentially be
learned.
23. MARKET CONDUCT – OVERSIGHT
What market conduct oversight activities can be undertaken?
Limited use of specific
market conduct oversight
techniques such as media
monitoring and mystery
shopping. Why?
24. MARKET CONDUCT – OVERSIGHT
Number of inspections conducted in one year
In-site Although on- and off-site inspections are
the primary compliance monitoring
tools, 65% of countries does not have a
specific audit or inspection programme
for consumer protection monitoring.
This may be an area where substantial
improvement can be made in the short
term.
Is there a specific checklist or auditing program
Off-site that focuses on consumer protection issues?
25. MARKET CONDUCT – OVERSIGHT
Dedicated staff
Are there dedicated staff responsible for market
conduct supervision at any of the agencies you
identified in question 1?
In half of the countries the answer is
positive
Is market conduct supervision a general duty of
supervisory staff (e.g. banking department) in the
course of normal inspections?
In more than 80% of the countries,
yes. This could be a point of
consensus in making future
recommendations (w development
of adequate tools)
26. MARKET CONDUCT – REMEDIAL AND ENFORCEMENT ACTIONS
What is the nature of the enforcement action?
In most countries, remedial
action on consumer protection
issues is limited to letters of
warning, although 65% of
countries does have the power
to issue monetary fines for non-
compliance.
Number of times this action of this type was taken in 2010
Your answers seem to indicate
that 55% of the countries have
issued between 1 and 5 fines
for market conduct compliance
Surprisingly high
27. MARKET CONDUCT – SELF-REGULATION
Standards/codes of conduct
Are there industry codes of conduct in your
country which identify specific market conduct The majority of the countries
standards?
have codes of conduct.
In those cases, the regulators
has often endorsed the code,
If so, has the regulator endorsed the code of
which is enforced by a third-
conduct? party.
And, is there a self-regulatory body (or bodies) that
is responsible for enforcing of the standards?
28. MARKET CONDUCT – SELF-REGULATION
Standards/codes of conduct
The codes of conducts probably refer mostly to banking codes of conduct (followed
by insurance).
It seems that the codes mostly deal only with generic issues, and not with specific
consumer protection issues.
Which products/services are covered? What providers are required to comply?
What types of providers have to comply with
What areas are covered? the standards or codes of conduct?
29. MARKET CONDUCT – PRICING, TRANSPARENCY & DISCLOSURE
Does your country have transparency & disclosure regulations?
Does your country have transparency and disclosure
regulations?
Most countries do have some
form of transparency
regulation, mostly focused on
interest or cost calculation.
However, there is no uniform
Is a specific format mandated for loan documentation?
approach in calculating the
cost of credit (see next slide)
Only a minority of countries
have a requirement for
Is there a standard template for either the standard pre-agreement
disclosures or the contract that is
endorsed by the regulator? disclosure for financial service
contracts.
This may require attention in conforming
to the G20 principles.
30. MARKET CONDUCT – PRICING
Price calculation formula mandated for credit products
What specific charges and fees are included in the formula?
31. MARKET CONDUCT – TRANSPARENCY & DISCLOSURE - DEPOSIT AND SAVINGS PRODUCTS
What information is required to be disclosed to the client?
(Before Sale *)
32. MARKET CONDUCT – TRANSPARENCY & DISCLOSURE – CREDIT PRODUCTS
What information is required to be disclosed to the client?
(Before Sale *)
33. MARKET CONDUCT – TRANSPARENCY & DISCLOSURE – MONEY TRANSFERS
What information is required to be disclosed to the client?
(Before Sale *)
34. MARKET CONDUCT – TRANSPARENCY & DISCLOSURE – PAYMENT SERVICES
What information is required to be disclosed to the client?
(Before Sale *)
35. MARKET CONDUCT – TRANSPARENCY & DISCLOSURE – E-MONEY
What information is required to be disclosed to the client?
(Before Sale *)
36. MARKET CONDUCT – PRICING AND TERMS AND CONDITIONS OF COMPARABLE PRODUCTS/PROVIDERS
Is the information provided to consumers?
Around 50% of countries publish
some comparative information
on the pricing or terms and
conditions of financial services.
This is mostly published in the
central bank website.
If it is recognized the
If yes, where?
importance of this information
for customers, how to make it
available to the majority of
the clients?
37. MARKET CONDUCT – TRANSPARENCY AND DISCLOSURE
Continuing information to customers
Is the provider required to provide periodic If yes, what is the due communication?
information to the client regarding their
deposits/savings?
Around 75% of countries require periodic disclosure of
information on deposit or savings accounts, mostly
through disclosure in account statement
38. MARKET CONDUCT – TRANSPARENCY & DISCLOSURE
What are two main priorities for the next year?
53%
To ensure transparency
and effective disclosure in
transactions with banks
29%
To identify cost-effective
tools to provide to the
public information on
pricing and terms and
conditions of comparable
products/providers
39. MARKET CONDUCT – SALES AND MARKETING PRACTICES
Is there any regulations for sales and marketing practices?
More than 40% of
countries have no
regulation on sales
and marketing
practices.
40. MARKET CONDUCT – SALES AND MARKETING PRACTICES
What conducts and providers are regulated?
Restrictions to prevent
personal data related to a
consumer from being shared
with external parties
Obligation to verify credit
history of consumer before
selling a credit product
Obligation to verify repayment
capacity of the consumer
before selling a credit product
Prohibition of unfair, deceptive
or aggressive practices
Suitability of products and
services for the consumer
Prohibition on reckless lending
It seems that banks and NBFIs
covered similarly
41. MARKET CONDUCT – SALES AND MARKETING PRACTICES
Is there any regulatory provision that mandates To what providers does this apply?
the provider:
To train staff on responsible sales practices
To supervise staff on responsible sales practices
42. MARKET CONDUCT – SALES AND MARKETING PRACTICES
The two main priorities for the next year
Suitability of products
and services for the
consumer
Obligation to verify
repayment capacity of
the consumer before
selling a credit product
Obligation to verify
credit history of
consumer before selling
a credit product
43. MARKET CONDUCT – ANCILLARY AREAS
Credit bureaus
Credit information sharing and credit bureaus: Describe the nature of credit
information sharing, in relation to the statements below.
Many countries have
implemented credit
information sharing
initiatives, although
participation is
mostly limited to
banks. In most cases
MFIs are not included
in the credit bureau
system (see next).
44. MARKET CONDUCT – ANCILLARY AREAS
Credit bureaus
For "These institutions report information to the For "These institutions have access to the
credit bureau", please select : collected information", please select :
45. MARKET CONDUCT – ANCILLARY AREAS
Abusive clauses
Abusive clauses: Is there any clause, term, or condition that,
if inserted in a contract, is automatically considered void or
“deemed unwritten”?
Only a minority of
countries have any
specific limitations
on unfair contract
terms. This may be
an area where
significant
improvement is
possible.
46. MARKET CONDUCT
The main priorities for the next year
In your country, what are the four main priorities for the next year
for enhancing market conduct policy and regulatory framework?
Please select up to four priorities, with 1 being the highest priority.
47. CONSUMER EMPOWERMENT
Complaint handling and redress mechanisms
Do consumers have access to affordable and Is the access to affordable and efficient
efficient complaint handling and redress complaint handling and redress mechanisms a
mechanisms in your country? statutory right in your country?
48. CONSUMER EMPOWERMENT
Complaint handling and redress mechanisms
For each of the help and redress mechanisms listed in the table
below, indicate whether a solution is in place.
52. CONSUMER EMPOWERMENT
Complaint handling and redress mechanisms
In your country, what are two main priorities for the next to provide consumers
access to affordable and efficient complaint handling and redress mechanisms?
Please select up to two priorities.
53. CONSUMER EMPOWERMENT
Strategies, mandates, and tools for financial literacy
Is there a national strategy to enhance the Does the regulator have a statutory responsibility to
financial literacy, capability and awareness of promote consumer literacy, capability and
consumers? awareness with respect to financial services?
Does the regulator undertakes programmes Is there a special unit or dedicated staff responsible
to promote consumer literacy, capability for financial consumers’ literacy, capability, and
and awareness with respect to financial awareness?
services?
54. CONSUMER EMPOWERMENT
Strategies, mandates, and tools for financial literacy
Please indicate whether any of the following Please indicate whether any of the following
instruments are used to promote financial instruments are used to promote financial
consumer literacy, capability and awareness by consumer literacy, capability and awareness by
the financial sector regulator or another the financial institutions:
government agency:
56. CONSUMER EMPOWERMENT – STRATEGIES, MANDATES, and TOOLS
Do financial consumers’ literacy, capability, and awareness
programs target unbanked or low-income people?
57. MARKET CONDUCT
Has your institution ever evaluated the effectiveness of its
financial literacy, capability, and awareness initiatives?
58. CONSUMER EMPOWERMENT
Strategies, mandates, and tools for financial literacy
What constraints and limitations keep your institution from
promoting financial literacy, capability, and awareness?
59. CONSUMER EMPOWERMENT
Strategies, mandates, and tools for financial literacy
Over the next year, what are the main priorities for your
country in reference to financial consumers’ literacy,
capability and awareness?
60. CONSUMER EMPOWERMENT
Strategies, mandates, and tools for financial literacy
> No clear mandate
> A few countries have clear strategies
> But you all are doing that!
> Without a baseline
> Using different tools, implementing many different projects
> But without knowing their effectiveness
> With lack of financial resources (for the reasons above?)
> And scarce collaboration with private sector and advocates groups
61. Session II
G20 High-level principles on
financial consumer protection
> Impact on CEMC WG members
> Possible role of the CEMC WG in the implementation of the principles
62. Purpose of the session
Present
> Overview of the G20 Principles on Financial Consumer Protection
Comment from members of the Working Group
> Any areas of the G20 Principles which may be difficult to implement;
> or is inconsistent with reality in particular countries;
> or is silent on an aspect of consumer protection which is a pressing
concern?
Views and suggestions
> What next? Any issues to take forward? How? Level of priority?
63. Framework for Principles
What are the objectives of financial consumer protection?
What are the objectives of the G20 Principles?
> Covering all areas of financial services
> Consumer confidence in financial services, to promote growth &
stability
> Respond to: Increased transfer of risk to consumes; complexity of
products;
> Rapid changes & new (non-bank) providers & intermediaries
> While financial access & literacy remain low
> Voluntary principles, designed to complement sector-specific
guidelines (IOSCO / BSBS / IAIS)
> Principles may need to be adapted to national or sectoral
circumstances
64. Draft Principles – 1
1. Legal & Regulatory Framework
> “integral part of the legal & regulatory framework”
> “legal & judicial mechanisms to protect against financial fraud &
abuses”
> Appropriate regulation & supervision of service providers, agents &
advisors
> Consultation with industry, consumer bodies, professional bodies &
research institutions
2. Role of oversight bodies
> “Must be oversight bodies with explicit responsibility for financial
consumer protection”
> Independence, accountability, resources, powers …
> Mechanism for effective cooperation between oversight bodies
65. Draft Principles
3. Equitable & fair treatment for consumers
> “Should be part of the corporate culture of financial service
providers
> “Similar protection for similar products & services
> “Special attention to vulnerable groups
4. Disclosure & transparency
> “Provide key information on benefits, terms, risks, costs
> “intermediary remuneration & conflicts
> “Standard pre-contractual disclosure promoted
> Health warnings (& information) on risky products
> Requirements on providers of advice
66. Draft Principles
5. Financial Education & Awareness
> “Promote education & awareness
> Information on consumer rights easily accesible
> Recommend implementation of OECD Guidelines & Principles
> Special focus on vulnerable groups
6. Responsible business conduct of Financial Service Providers &
their agents
> “Providers accountable for action of their agents
> Objective of engagement with consumers: “best interest of clients”;
“assess capabilities & needs of clients”, before providing products
or services
> Staff properly trained
> Avoid / disclose conflicts of interest
> Remuneration structure encourage responsible business conduct
67. Draft Principles
7. Protection of Consumer Rights
> “Protect rights to deposits, savings & similar products
> High degree of certainty; appropriate mechanisms
8. Protection of consumer data & privacy
> “Through appropriate mechanisms
> Define purpose of collection; processing & disclosure
> Right of consumers to be informed (of data sharing), have access
their data; data corrected or deleted
68. Draft Principles
9. Complaints handling
> “Redress mechanisms … accessible, cheap, effective etc.
> Publish complaints statistics
> Providers & agents to provide first line of complaints & redress
> Independent process available of not resolved
10. Competition
> “National & international competitive markets, for choice & price
competition
> Allow consumers to search & switch
69. Draft Principles
Principles ????
1. Legal & regulatory framework Any of these inappropriate?
2. Oversight bodies
3. Equitable & fair treatment Any important issues missing?
4. Disclosure & transparency
5. Education & awareness
Conflict with financial
6. Responsible Business Conduct
inclusion?
7. Protection of consumer rights
8. Protection of data & privacy
Challenges in implementation?
9. Complaints handling
10. Competition
… what next?
70. Related developments to consider
FSB: “Consumer Finance Protection
- consumer credit & mortgages
- financial stability aspects
- assessment of current practices
• Implications?
Issues:-
• Current consumer protection frameworks in credit &
“consumer protection authorities” • Concerns?
• Engaging with consumer advocacy groups
• Competing objectives (prudential / protection); Independence
& accountability • Suggestions?
• Enforcement
• Complaints & dispute resolution
• Responsible mortgage lending practices = main issue
• Product regulation
• Unfair selling practices
• Disclosure & transparency
71. Any other issues in this respect?
• ????
What
• ????
To
• ????
• ???? Do?
72. Session III
CEMC WG’s Governance
> Election of CEMC WG chairperson
> Announcement of new chairperson
> Discussion and approval of CEMC WG seminal documents
73. Governance
ELECTED CHAIR
> Bangko Sentral ng Philipinas
ELECTED CO-CHAIR
> Central Bank of Uganda
SEMINAL DOCUMENTS
> The CEMC WG members approve the charter and concept
note
74. Session IV
CEMC WG’s sessions at the
2011 AFI GPF
> Session on financial literacy
> Session on transparency
75. Thursday, 29 September, 17.00h – 18.30h
Financial literacy and financial inclusion
FACILITATOR
> Ahmed Dermish, BFA
PANELISTS
> Bipin Nair, Reserve Bank of India
> Giovanna Priale, SBS Peru
> (TBC)
SESSION OBJECTIVES
> To increase understanding of the relationship between financial literacy
and inclusion
> To gain a better understanding of the role of policymakers/regulators
> To identify cost-effective tools to increase the level of literacy
> To provide input into the AFI CEMC WG’s work on this topic
FORMAT
> Advisory teams
76. Friday, 30 September, 9.30h – 10.45h
Improved transparency standards for financial inclusion
MODERATOR
> Shaun Mundy
PANELISTS
> Antoine Traore, BCEAO
> Hastings Mzoma, Central Bank of Malawi
> Belinda Caraan, Bangko Sentral ng Philipinas
> Gaiv Tata, the World Bank
> Katherine McKee, CGAP
> Gabriel Davel, AFI Associate
SESSION OBJECTIVES
> To identify key issues in pricing and transparency
> To discuss regulatory approaches and good practices re: transparency
> To provide input into the AFI CEMC WG’s work on this topic
FORMAT
> Talk show
77. Session V
Agenda setting and
operationalization
> Presentation of proposed log-frame
> Creation of subgroups
78. Log-frame: template
Intervention
What should it show: It answers the question:
logic
Change of state and improved
Impact/Goal What is our vision of the future?
situation
Situational or behavior change
Where would we like to get to in
Outcomes or improvement that is
the next 5 years?
necessary to reach the impact
The tangible products, services, What are the main things that
and results delivered which need to be delivered (in the
Outputs
needs to be achieved to bring next year) by the working group
about the outcome to achieve the vision?
Tasks that have to be
What needs to be done to
Activities undertaken to deliver the
deliver each of these outputs?
desired outputs
79. Subgroups
5 subgroups
Transparency Sales and Avenues for Financial Harmonization
and disclosure marketing help and education of guidelines
practices redress
Guatemala Tanzania Liberia x Pakistan x Armenia x
Peru x Palestine x Russia RDC Thailand
BCEAO Philippines Senegal Mexico Paraguay
China Malawi Zambia
Uganda Angola
x = focal point
80. Session VI
Sub-groups discussions
> Discussion of expected outcomes and outputs
> Discussion of work plan
81. Session VII
Next steps
> Finalization of log-frame
> Finalization of work plan
> Agenda and logistic for the next meeting
82. CEMC WG’s log-frame
Improved capacity of policymakers to design and implement effective policies to protect
Goal
and empower consumers
Guidelines on four priority areas for Consumer Empowerment and Market Conduct endorsed
by AFI network members
Outcome
Relevant international frameworks (standards, principles, etc.) are better harmonized
CEMC WG members recognized as leaders in consumer empowerment and market conduct
Developed evidence based policymaker’s guidelines in four priority areas
Produced report on country experiences
Improved capacity of CEMCWG members to assess and analyze solutions and mechanisms for
consumer protection and market conduct
Outputs
Identified and documented cost-effective tools that deliver information and enable redress
for the poorest segment of the population
Increased awareness among other policymakers and international stakeholders about
CEMCWG lessons and solutions
Develop and complete stocktaking survey
Conduct Knowledge Exchange visits between CEMC WG members
Undertake diagnostic study on selected CEMC WG members countries
Activities CEMCWG members present experiences and lessons learned in selected external forums
Hold peer learning workshop on diagnostic tools and methodologies, and policy solutions,
with strategic partners
Peer reviews of draft policies and regulations
Transparency and disclosure
MARKET CONDUCT
4 priority Sales and marketing practices
areas Avenues for help and redress
CONSUMER EMPOWERMENT
Financial education
83. Transparency and disclosures subgroup’s log-frame
Developed evidence based policymaker’s guidelines in the area of transparency, with focus
on cost-effective access to disclosed information (e.g. re: channels, standard contract for
basic products, code of conducts, comparable information of basic products)
Outputs
Produced report on transparency based on the results of the stocktaking survey
Identified and documented cost-effective tools that deliver information, also for the
poorest segment of the population
Analyze transparency section of the stocktaking survey
Activities Identify common challenges and good practices
Undertake diagnostic study on selected CEMC WG members countries
Superintendencia de Guatemala
Superintendencia de Peru (coordinator)
Members BCEAO
People’s Bank of China
Central Bank of Uganda
84. Sales and marketing practices subgroup’s log-frame
Developed evidence based policymaker’s guidelines in the area of sales and marketing
practices
Produced report on sales and marketing practices based on the results of the stocktaking
Outputs
survey
Identified and documented cost-effective tools that deliver information, protect, and
empower consumers, also for the poorest segment of the population
Analyze sales and marketing practices section of the stocktaking survey
Activities Identify common challenges and good practices
Undertake diagnostic study on selected CEMC WG members countries
Central Bank of Tanzania
Members Palestine Monetary Authority (coordinator)
Bangko Sentral ng Philippinas
85. Help and redress subgroup’s log-frame
Developed evidence based policymaker’s guidelines on help and redress mechanisms
Produced report on avenues for help and redress mechanisms based on the results of the
stocktaking survey
Outputs
Identified and documented cost-effective tools that protect and empower consumers
providing access to cost-effective help and redress mechanisms, also for the poorest
segment of the population
Analyze relevant section of the stocktaking survey
Activities Identify common challenges and good practices
Undertake diagnostic study on selected CEMC WG members countries
Central Bank of Liberia (coordinator)
Members Ministry of Economic Development of Russia
Ministere de Finances du Senegal
86. Financial education subgroup’s log-frame
Developed evidence based policymaker’s guidelines on financial education, with focus on
the development of national strategies
Outputs Produced report on financial education based on the results of the stocktaking survey
Identified and documented cost-effective tools that deliver financial education, also for the
poorest segment of the population
Analyze relevant section of the stocktaking survey
Activities Identify common challenges and good practices
Undertake diagnostic study on selected CEMC WG members countries
State Bank of Pakistan (coordinator)
Banque Centrale du Congo
Members CNBV Mexico
Reserve Bank of Malawi
National Bank of Angola
87. Harmonization of guidelines subgroup’s log-frame
Identified and documented problems with concurrent internationally adopted frameworks
Outputs (of standards, principles, and indicators) used to assess consumer empowerment policies
and market conduct regulations in AFI member countries
Analyze relevant frameworks
Activities Identify common challenges due to the co-existence of concurrent frameworks
Provide guidance to the other 4 CEMC WG sub-groups
Central Bank of Armenia (coordinator)
Central Bank of Thailand
Members
Banco Central do Paraguay
Bank of Zambia
Editor's Notes
Recognize the work that the coordination group has done in the past 5 months and thank Bel, Hastings, McEwen, Antoine, Habasonda, Noor (and also Saied and Joao who could not attend today’s meeting) for the input in the production of the survey, the charter, and other documents, and the design of today’s meeting agenda.
11 new membersAbsent: Joao (Brazil), Pungki (Indonesia), Sharon (Malaysia), (Guinee), Jan (NCR), Matu (CBK)Welcome new members:Ms Laura Monteiro from the BancoNacional de AngolaMs Shaohua Zhang from the People’s Bank of ChinaMs Betsy Garcia Rivas from the Superintendencia de GuatemalaMrBenigno Lopez from the Banco Central del ParaguayMs MillaGuillen from the Superintendencia de PeruMonsieur HadjiBiraneDiop du Ministere de l’Eco et des Fianances du Senegal
Recognize the work that the coordination group has done in the past 5 months and thank Bel, Hastings, McEwen, Antoine, Habasonda, Noor (and also Saied and Joao who could not attend today’s meeting) for the input in the production of the survey, the charter, and other documents, and the design of today’s meeting agenda.
Recognize the work that the coordination group has done in the past 5 months and thank Bel, Hastings, McEwen, Antoine, Habasonda, Noor (and also Saied and Joao who could not attend today’s meeting) for the input in the production of the survey, the charter, and other documents, and the design of today’s meeting agenda.
The findings of the survey will help CEMC Working Group members to: a) develop policy and regulation at the national level, b) identify common practices and challenges within the working group, c) narrow and refine the work priorities; and d) reach agreement on expected outputs.
CONSTITUTION regional relevance: Uganda and Zambia; Senegal; Mexico, Peru, Paraguay and Guatemala
“Other” has to be cleaned. Often repeating what is in previous answers.
Investigate more the interaction between access and protection, quality of access/protection and inclusion, and literacy and access.Interesting to see results of survey on literacy later, also, to be definitely considered in the follow up. In part differs from felt priority in the first meeting, when transparency rated 1st.
Slide 15 (“If market conduct standards are in place (either through legislation or regulations),which products/services are covered?”) – not a comment on the slide; but I am very surprised by some of the high percentages. It might be helpful to try to tease out (if time permits) respondents' understanding of “market conduct standards “ - and the sorts of standards which are in place.
I suspect Q11 response is misleading. Maybe it indicates that in 53% of cases there are some agency with dedicated consumer protection staff, including general / non-financial consumer protection agencies.
[The codes of conduct in 15 and 16 probably refer mostly to banking codes of conduct? How specific are these on consumer protection issues? 16A seems to indicate that the codes mostly deal only with generic issues, and not with specific consumer protection issues. A regional disaggregation of the responses would be interesting.]80% of countries have some kind of self-regulatory body. This probably refers mostly to bankers’ associations. [18]
How specific are these on consumer protection issues?
[20, 21, 21A, 23-2]. (also have a look at 27; This graph seems to expand on this issue, but mine is not clear enough to interpret)
Slide 40 (“23-2: What information is required to be disclosed to the client?Credit products”): I am sceptical about the accuracy of some of the responses – eg it appears that several countries mandate the disclosure of more than one of APR, EIR and TCC; and more than 50% say that they mandate the disclosure of cooling-off period, when slide 29 (“16A: What areas are covered?”) suggests that no Code contains provisions on cooling-off.
Very few countries prescribe the that the cost of money transfers must be disclosed in advertising, brochures or similar material. Disclosure is mostly limited to material provided at the branch or point of sale. [23-3, 23-4]. Greater focus on disclosure of money transfer cost in promotional material and cost may have significant benefit in increasing the level of competition.
[25, 25A]. (I wonder what the ‘other’ in 25A stands for?).
As [26, 26A]
The prioritisation graph [31] seems to indicate that most countries do not yet have specific plans in place to address weaknesses in transparency and disclosure (31 - could also be interpreted differently?)
[33A, 33B]
[34].Verify difference between civil law v common law jurisdictions. Likely the latter does not have this type if regulation. Also, Colombia’s regulators specified the abusive clauses in August 2011
Only a minority of countries have any specific limitations on unfair contract terms. This may be an area where significant improvement is possible. [34].Verify difference between civil law v common law jurisdictions. Likely the latter does not have this type if regulation. Also, Colombia’s regulators specified the abusive clauses in August 2011
Only a minority of countries have any specific limitations on unfair contract terms. This may be an area where significant improvement is possible. [34].Verify difference between civil law v common law jurisdictions. Likely the latter does not have this type if regulation. Also, Colombia’s regulators specified the abusive clauses in August 2011
Only a minority of countries have any specific limitations on unfair contract terms. This may be an area where significant improvement is possible. [34].Verify difference between civil law v common law jurisdictions. Likely the latter does not have this type if regulation. Also, Colombia’s regulators specified the abusive clauses in August 2011
Only a minority of countries have any specific limitations on unfair contract terms. This may be an area where significant improvement is possible. [34].Verify difference between civil law v common law jurisdictions. Likely the latter does not have this type if regulation. Also, Colombia’s regulators specified the abusive clauses in August 2011
Only a minority of countries have any specific limitations on unfair contract terms. This may be an area where significant improvement is possible. [34].Verify difference between civil law v common law jurisdictions. Likely the latter does not have this type if regulation. Also, Colombia’s regulators specified the abusive clauses in August 2011
Only a minority of countries have any specific limitations on unfair contract terms. This may be an area where significant improvement is possible. [34].Verify difference between civil law v common law jurisdictions. Likely the latter does not have this type if regulation. Also, Colombia’s regulators specified the abusive clauses in August 2011
Only a minority of countries have any specific limitations on unfair contract terms. This may be an area where significant improvement is possible. [34].Verify difference between civil law v common law jurisdictions. Likely the latter does not have this type if regulation. Also, Colombia’s regulators specified the abusive clauses in August 2011
Agenda setting and operazionalizationPresentation of proposed log-frameDiscussion of the CEMC WG expected outcomes and outputsCreation of subgroupsSub-groups discussionsCoffee breakNext stepsFinalization of log-frameFinalization of work plan (division of labor between subgroups, participation in relevant events, etc.)Agenda and logistic for the next meeting
GovernancePresentation of CEMC WG sessions at 2011 AFI GPFRelevance of the sessions and role of CEMC WG membersLunchAgenda setting and operazionalizationPresentation of proposed log-frameDiscussion of the CEMC WG expected outcomes and outputsCreation of subgroupsSub-groups discussionsCoffee breakNext stepsFinalization of log-frameFinalization of work plan (division of labor between subgroups, participation in relevant events, etc.)Agenda and logistic for the next meeting