Improving financial sector efficiency

Businesses and individuals alike need a stable economic and financial environment to maximise their potential. This requires good governance in the financial sector. SECO assists in setting up the necessary institutions. This includes legislation and policies that favour economic activities and are in line with international norms and standards.

SECO strengthens the financial sector as a foundation of a country’s economy.

In a properly functioning financial market, funds flow between lenders and borrowers. Payment transactions are easy to make, saving pays off, and bank deposits are used to invest in production. There is also a better distribution of risk. When there is a stable stream of payments between households, firms and the government, the economy can grow.

Bank staff serving numerous clients at a long counter.
Banks should be able to operate efficiently and economically. SECO supports financial regulators in drafting appropriate rules and regulations.

The following domains are of particular importance for SECO’s work:

Prudent financial market regulation

The importance of supervising banks and insurance companies comes to light in times of financial crisis. Supervision creates a more secure and reliable financial environment. To this end, the government defines rules and directives to guide and oversee the market behaviour of lending institutions and other financial providers. This protects investors’ deposits and assets from the risk of default and guarantees money supply for the economy.

Reliable monetary policy

Price stability is important for a country’s economic development. If the price level rises or falls too much over an extended period of time, this generates uncertainty among investors, firms and households. A country’s central bank uses monetary policy to stabilise prices and prevent money from losing its purchasing power.

Dynamic capital markets

Capital markets are a source of financing for businesses and households. They promote economic growth. Stock exchanges and trading platforms allow for secure and efficient transactions on financial markets.

Streamlined international payments

In a globalising economy, more and more money transfers and payments are made between private consumers. SECO helps partner countries streamline these payment flows and keep the costs low.

Integrity of the financial sector

Financial centres will gain international recognition only if they are transparent and reliable. This is the responsibility of market participants but also a task of appropriate regulation, control and oversight. SECO assists countries in efforts to undermine transactions for criminal purposes and to prevent financial market abuse.

How SECO supports partner countries

SECO supports supervisory authorities and central banks in partner countries in building the necessary skills and capacities. It collaborates with partners to design reforms in line with international experience and good practice. It offers partner countries technical assistance and training in the introduction and implementation of standards.

Last modification 27.07.2020

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