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Sr Financial Sector Spec.

Note: This position is based in Vienna, Austria. This position will be filled under the terms and conditions that apply, under current policies, to hiring IRS staff into a Satellite Office.

Regional Context

The Europe and Central Asia (ECA) region comprises of 30 extremely diverse clients, with a population of nearly 500 million people. Four of our clients are IDA only and another 5 are IDA blend countries. The remaining 21 are IBRD credit-worthy though not all have active lending programs. Although 10 of our clients have joined the EU and 7 of these have graduated, most continue to remain active recipients of knowledge and/or lending services. CASs/CPSs reflect this strong diversity with substantial variation in lending prospects, but strong demand for Bank technical services is present across the board.

Over the last 20 years of transition, ECA countries have integrated into the global economy across many dimensions such as trade, finance, and labor flows. GDP in the Region grew by two-thirds from 2000 to 2008 – an enviable growth of an average of 6.5 percent a year. Yet despite this progress, ECA was hit the hardest by the global economic crisis compared to the other regions in the Bank. Growth in the Region, which had peaked at about 7 percent in 2007, fell to a negative 6 percent in 2009.

The financial and economic crisis led to a substantial increase in Bank lending and knowledge activities in all ECA countries, including in several EU members states (e.g., Latvia and Hungary). The crisis helped serve as a powerful reminder of the relevance of the Bank both as an attractive source of funding and a reliable provider of timely and quality advice.

It is projected that ECA is going to be the slowest region to recover from the crisis. Growth in 2010 reached about 4 percent, and prospects for 2011–13 are only slightly better. Based on this changing context, the new ECA strategy is focused on developing a new growth model for the region through:
1. Increasing competitiveness to achieve faster growth.
2. Pursuing social sector reforms and fiscal adjustment to achieve more inclusive growth.
3. Supporting climate action to achieve more sustainable growth.

Even while declining from the heights of the crisis, we expect demand for our lending and advisory services post-crisis to remain strong. But we are constrained in our capacity to respond given budget constraints and a limited IDA and IBRD resource environment. This requires an increased results focus to help direct our resources to where they will have the greatest impact, along with continued emphasis on leveraging partnerships and expanding our fee for services activities in MICs, building on the successful experience in Russia.

Financial and Private Sector Development Context

The immediate response to the global financial crisis emphasized short term stability and liquidity issues, giving specific institutions/forums such as the International Monetary Fund (IMF) and the Financial Stability Board (FSB) the mandate to bring these issues to the forefront of the global policy response. While the World Bank (WB) effectively contributed to this response, the WB’s role becomes even more crucial as we move beyond these short term efforts, and help countries navigate the ensuing complex financial sector development landscape going forward. In particular, ECA countries face the challenge of developing their own regulatory framework, and converging to global and European standards and best practices. In addition, ECA countries will seek assistance in the post crisis era on a range of topics including: how to benefit from global financial integration while protecting themselves from the excessive capital inflows and its risky allocation; defining how and what parts of the macro-prudential agenda is relevant for ECA countries in the view of their current and possible future systemic risks, and what type of financial services supervisory structure is best suitable for them given the size and structure of their financial systems. The WB brings a set of unique comparative advantages, embedded in its mandate, culture, and structure, that can help clients address these longer-term challenges in the post-crisis era. Further, the WB focuses on longer-term development challenges in a broad and inclusive manner, with a careful eye on both growth and stability.

Location in Vienna of the Financial Sector Advisory Center (FinSAC) brings several advantages to ECA Countries:

• Vienna is in a key strategic position. Several Austrian banks have operations and influence in various ECA countries, and therefore implications for host/home supervision and other regulatory issues matters significantly. In addition, the Vienna Stock Exchange is one of the largest in Central Europe and a competitor and integrator for the CEE country exchanges, with significant influence on the development of capital markets in the region.
• Vienna is centrally located in the midst of the EU and the policy discussions concerning EU financial regulatory matters.
• Geographically, Vienna is in an optimal location in the center of Europe for travel and frequent client contact in Emerging Europe.

FinSAC Activities

FinSAC will target priority areas such as macro-prudential supervision, systemic risk monitoring, implementation of new Basel III solvency and liquidity standards, home/host supervisory issues, bank resolution frameworks, financial consumer protection and corporate governance. It will deliver services through three distinct channels: (a) undertaking of client-specific assignments; (b) execution of regional research projects with corresponding outreach activities; and (c) organization of technical workshops, conferences and seminars
Sr Financial Sector Spec.