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Banking Sector and Capital Market Development Program

sector: Finance | country: Kyrgyz Republic

Implementation of the program demonstrated that consistent government support is critical to success. The effective implementation of the banking sector component is attributable to the National Bank of the Kyrgyz Republic’s (NBKR) strong commitment and ownership of the proposed reforms. In contrast, the capital market component lacked a clear champion as a result of political developments. Therefore, despite intensive policy dialogue, and awareness and capacity-building efforts, the pace of reforms did not proceed as well as anticipated.

The ownership and rationale of policy reforms should be carefully assessed at appraisal. In assessing ownership, it is important to remember that policy actions affect many stakeholders, even within the government. In this case, the legislative branch was not enthusiastic about adopting complex new laws pertaining to the regulation of capital markets that would then be interpreted by agencies outside their direct control.

The process of translating drafts of the Law on the Securities Market from English into Russian and back into English affected its readability in English. Achieving a reasonable and consistent standard of translation into both Russian and English remained a problem. Once the final version of the draft law has been adopted, it would be desirable if an official English translation could be produced for the benefit of ADB, foreign investors, and other interested parties. In the meantime, an accurate consolidated translation of the final draft of the law should also be produced for the records of the technical assistance (TA).

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