Enhancing crisis preparedness through simulation exercises
Jul 26, 2021
“In crisis, financial safety net players are only as strong as their weakest link,” remarked Rafiz Azuan Abdullah, CEO, Perbadanan Insurans Deposit Malaysia (PIDM) in his closing speech at the recently held webinar titled “Inter-agency Knowledge Sharing Session: Simulation Exercises”.
- Ruth Walters, Senior Advisor, Financial Stability Institute, Bank for International Settlements;
- Nadine Saryeddine, Director, Crisis Simulations Centre of Excellence, Canada Deposit Insurance Corporation (CDIC);
- Ihda Muktiyanto, Director, Risk Management and Legal, Secretariat of Financial System Stability Committee, Indonesia;
- David Farelius, Senior Advisor, Riksbank, Sweden; and
- Christopher Jackson, Head of Division, International Resolvability, Bank of England.
“A lot of planning and resources are spent on simulations and they are necessary to help us identify pressure points, and inform how we can work collectively to build complementary strength in those identified areas. The first step to addressing them is to live through them, even if only in a simulated environment,” he said.
The webinar saw close to 100 participants in attendance from PIDM, Bank Negara Malaysia, Ministry of Finance and invited observers from the International Association of Deposit Insurers (IADI).
Preparedness in crises continues to be an important agenda for PIDM in 2021, as outlined in its Corporate Plan 2021 - 2023. This is being achieved through focus on ensuring a high-level state of preparedness internally, and enhancing coordination among the financial safety net players in Malaysia through regular simulations.
Ruth Walters, Senior Advisor, Financial Stability Institute, Bank for International Settlements moderated the sharing session, which discussed the objectives, design and benefits of different types of simulation exercises.
The session also saw speakers from other jurisdictions sharing their experience in designing and participating in simulations that involve internal, local inter-agency and cross-border stakeholders.
Different aspects of simulation and testing, such as developing a centralised and programmatic approach to testing capabilities across the organisation, principles for designing effective inter-agency simulations, governance arrangements for simulations involving multiple authorities, and types of exercises used in cross-border contexts were deliberated.
A panel discussion which also addressed participants' enquiries into measuring effectiveness and success factors for simulations was also held. Speakers also shared insights on how best designers of simulations follow-up on action items arising from inter-agency and cross-border simulations.
The next inter-agency knowledge sharing session by PIDM is planned for September 2021.