A REQUEST FOR EXPRESSIONS OF INTEREST

(CONSULTING SERVICES – INDIVIDUAL CONSULTANT SELECTION)

Country: MONGOLIA                                                                                                   

Project name: STRENGTHENING FISCAL AND FINANCIAL STABILITY PROJECT

Credit No. 6084-MN; 6085-MN

Assignment Title: International Consultant for providing training on modeling interactions between macroeconomic policies and macroprudential policy

The Government of Mongolia has received a credit from the International Development Association toward the cost of the Strengthening Fiscal and Financial Stability Project (SFFSP), and it intends to improve fiscal policy and sustainability in a mineral-based economy, protect the poor and vulnerable, and restore confidence in the financial sector. The Ministry of Finance (MOF) will be responsible for the implementation of the project, including overall coordination, results monitoring.
The Mongolian financial system is dominated by the banking sector. Banks account for about 95 percent of total financial system assets. They are highly concentrated and competition remains limited, with the top five banks accounting for 67 percent of the total financial system assets.
Mongolia’s credit growth had rapidly accelerated in 2013–2014, reaching 54 percent at the end of 2013, fueled by substantial monetary easing by the Bank of Mongolia (BOM) through a series of quasi-fiscal policy lending programs. Fresh liquidity injected by the BOM reached MNT 3.5 trillion—18 percent of GDP—at its peak at the end of 2013. As the BOM began to gradually withdraw the monetary easing program and the economy gradually slowed from mid-2014, credit conditions have substantially tightened, with bank loan growth (year-on-year) dropping from 43 percent in June 2014 to less than 2 percent at the end of 2015. With tighter credit conditions and continued slowdown of the economy, the asset quality of banks has deteriorated significantly. Formally reported nonperforming loans reached 9.1 percent of total outstanding loans in November 2016, a substantial increase from 5 percent at the end of 2014. But NPL ratio slightly decreased to 8.5 percent at end of the 2017. The banking system is still vulnerable to substantial amount of loans concentrated in the riskier sectors—such as construction, mining, and real estate.
Capital markets remain in the early stages of development and the insurance market is small, with a penetration rate of about 0.64 percent of GDP. Progress in the development of Nonbank Financial Institutions (NBFIs) is slow, and continuous efforts are needed to build appropriate institutions, policies, and oversight arrangements.
The Financial Stability Council (FSC) was established in January 2010. According to the recent amendments to the Law on the BOM, main task of the FSC is to discuss the issues related to systemic risk identification, monitoring and mitigation at the meetings, and ensure coordination between member institutions’ activities for maintaining financial stability. The Secretariat of the FSC was established at the BOM with 5 staffs and is a permanent unit responsible for making risk assessment of the financial system, formulating macroprudential policy proposals intended to mitigate systemic risks and vulnerabilities, and preparing Mongolia’s semi-annual financial stability report.
Assessing financial stability is a complex process. The analytical framework to monitor financial stability is centered around the macroprudential surveillance and is complemented by surveillance of financial markets, analysis of macrofinancial linkages, and surveillance of macroeconomic conditions. The capacity of the Secretariat to perform financial stability assessment depends largely upon the quality and availability of the data, and development of the analytical framework. The analytical framework to monitor financial stability /systemic risk indicators, stress test, early warning system, etc./ is insufficiently developed. Thus, capacity of Secretariat’s staff to develop analytical framework of financial stability assessment needs to be improved further.

SCOPE OF WORK:
The main objective of this assignment is to organize an in-house training on modeling interactions between macroeconomic policies and macroprudential policy to strengthen capacity of the Secretariat’s staff and infrastructure of the Secretariat. Duration of the contract is one week.
Key responsibilities of the International Consultant will include providing training for the staff of the Secretariat of the FSC on the following matters, but not limited to:
1. Modeling interactions between macroeconomic policies (e.g. monetary, fiscal, exchange rate, crisis management) and macroprudential policy in terms of financial stability, which encompasses the following topics:
• Channels through which the above-mentioned policies can affect financial stability,
• Methodologies of the modeling /i.e. DSGE, CGE, SVAR/,
• Coordination of the policies in terms of financial stability, international best practice;
2. Policy model for analyzing macroprudential policy and assessment of the policy effectiveness.

THE SHORTLISTING CRITERIA ARE:

To be considered eligible candidates should have all the eligibility criteria listed below:
o Education: A suitable candidate should have a post-graduate degree in Economics and/or Finance.
o Experience: A candidate should have at least 15 years of professional experience with 5 years of specific experience in a central bank and/or supervisory authority. Candidates who have held senior positions in the financial stability units and/or as a financial sector supervisor would be preferred.
o Language skills:  Professional English in writing and speaking.
o Other skills:  Excellent interpersonal skills with the ability to function effectively and collaboratively in a team environment; proficiency in PC based applications such as Word, Excel and data management, and excellent web research and navigation skills; knowledge and experience in modelling (systemic risk, macroprudential policy and other macroeconomic policies), and programming with E-Views, MATLAB is strongly preferred.

CONTRACT DURATION: The consultant work is expected to commence in June, 2019 and the total duration of the assignment is one week. Payments will be released upon satisfactory completion of the deliverable.

Interested consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services.

1. Cover letter indicating why she/he considers her/himself suitable for the position,
2. Detailed CV highlighting relevant skills/experience,
3. Copy of diplomas or certificates.

The consultant will be selected in accordance with the World Bank’s Procurement Regulations for IPF Borrowers (July 2016).
Expressions of interest must be delivered in a written form to the address below by e-mail before 17:00 on June 12, 2019 (local time, Ulaanbaatar, Mongolia).
Further information can be obtained at the address below during office hours: 8:30 to 17:30 hours (local Ulaanbaatar time) or procurement@sffs.mn.
 
Attn: Ms.L. Bayarmaa, Procurement specialist,  
Project Implementation Unit
The World Bank – Strengthening fiscal and financial stability project,
Room #205, Negdsen undestnii 8/2, 4th khoroo, Chingeltei District, Ulaanbaatar, Mongolia
Tel: +976-70120582
Fax: +976-70110582

70120582