the 25th Anniversary report

FSVC
Financial
Services
Volunteer
Corps
2015
Improving the quality
of life in the emerging
market world
FSVC
Contents:
Financial
Services
Volunteer
Corps
Message from FSVC Chairman 1
Message from FSVC President & CEO 3
A Quarter Century of Transforming
Financial Sectors in the Emerging
Market World 4
How FSVC Provides Assistance
6
FSVC Key Areas of Expertise
8
The Value of Transforming
Financial Sectors
10
The Impact of FSVC’s Work
12
FSVC Volunteer Experts
16
Tribute to Andrei Kozlov
18
FSVC Vice-Chairmen
18
FSVC Chairmen
19
Where FSVC Works
20
2015
1
Message from
FSVC Chairman
William H. Donaldson
In 1990, John Whitehead and Cyrus Vance were asked by President George H. W. Bush
to organize a volunteer-based effort to help build new financial sectors to support
market-oriented economies across Eastern Europe and potentially the Soviet Union.
Both individuals were ideally suited to undertake the Herculean task that President
Bush assigned to them. Statesmen by nature and above the political fray, they were
both seasoned internationalists with unrivaled networks of friends and contacts in
the U.S. financial and legal communities, as well as around the world. They were also
close friends. They accepted their new assignment in the spirit of public service that
characterized both of them, and they set about their work with vigor to create the
Financial Services Volunteer Corps (FSVC). The model that Vance and Whitehead
conceived was simple, yet brilliant, and extraordinarily effective.
Twenty-five years later, we celebrate their important legacy by supporting the work
of FSVC as it moves into the next twenty-five years. I am proud of my own personal
association with this remarkable organization, which dates back to the early 1990s when
I served on the initial Advisory Board of FSVC. I am honored to serve as FSVC’s current
Chairman to help position it for the future.
With a quarter-century of experience in strengthening financial sectors in more than
50 emerging market countries, FSVC is extraordinarily well-placed to contribute to this
important work going forward. To those of us who were privileged to work at FSVC with
John Whitehead and Cyrus Vance, there is no doubt that this is just as they would have
wanted.
“Economic growth cannot occur
without the financial infrastructure
to support it. This includes a
healthy commercial banking
system, a solid central banking
capability, and strong capital
markets. The social and economic
prospects of the countries in
FSVC’s sphere of operations are
dependent on the development of
this infrastructure.”
– Cyrus Vance & John Whitehead
3
Message from
FSVC President & CEO
J. Andrew Spindler
As the Financial Services Volunteer Corps celebrates its 25th Anniversary, the
organization, its friends and supporters can look back on a quarter century of
accomplishments in more than 50 countries in the emerging market world.
On the surface, this work, carried out by more than 9,000 experts from the global
financial sector and related fields, has helped build financial infrastructure essential
to support healthy market economies. At a more fundamental level, this work has
materially improved the quality of life for tens of millions of individuals, in countries
extending from Morocco to Indonesia.
While FSVC’s work has focused in technical and policy terms on financial sector
strengthening, that has been a means to a much more important end: creating jobs,
promoting economic growth, and fostering hope and a better quality of life in the
countries that have sought FSVC’s expert assistance.
FSVC’s work began in Eastern Europe in the early 1990s but soon expanded far beyond
that region. Over the intervening years, the organization has compiled a remarkable
record of accomplishments in promoting economic stability in the emerging market
world. Some of the most notable include:
-- Watershed work to set up market-based financial systems in Eastern Europe
in the 1990s following the collapse of communist regimes there;
-- Help to Russia over 15 years to build the legal and regulatory
foundation for a modern financial sector;
-- Assistance to establish deposit insurance systems in
countries ranging from Russia to Indonesia;
-- Work around the Middle East and North Africa to strengthen the
capacity of financial sectors to support job creation and access
to capital for small and medium-sized enterprises; and
-- Support to financial sectors in Sub-Saharan Africa to promote
financial integrity as well as financial market integration.
Twenty-five years into its mission, FSVC is poised to continue making tremendous
contributions to the economic and financial development of the emerging market world.
This work is more important than ever.
FSVC
A Quarter Century of Transforming
Financial Sectors in the
Emerging Market World
1990
1993
1995
1999
2003
FSVC is founded at
U.S. Presidential Initiative
by John Whitehead and
Cyrus Vance.
FSVC, in collaboration
with the Federal
Reserve Bank of New
York and Fairfield
University, trains
more than 200 young
Russian bankers
in market-based
banking, followed
by internships at
commercial banks
across the United
States.
FSVC expands beyond
Russia and Ukraine to
other Republics of the
Former Soviet Union,
including Kazakhstan
and the Kyrgyz Republic.
Following the global
financial crisis in
1998, FSVC provides
critical technical
assistance to
Indonesia, delivering
recommendations
directly to the
President.
FSVC sends lead
missions to Egypt,
Jordan, Morocco and
the Gulf region, marking
the beginning of work
in North Africa and
the Middle East. The
missions concluded
that job creation and
support for small
businesses should be
a critical economic
priority.
2000
1990
1990
1994
2001
2003
Cyrus Vance and
John Whitehead
head FSVC lead
missions to Poland,
Czechoslovakia,
Hungary and
Yugoslavia.
FSVC implements
first project in the
Ukraine.
A month after 9/11,
FSVC Executive
Director Andy
Spindler and Director
John Walker publish
an op-ed piece in The
International Herald
Tribune urging that
more attention be
paid to improving the
financial well-being
of people in emerging
market countries to
address “the economic
roots of terrorism.”
FSVC conducts first
mission to India,
where it would work
for 5 years to increase
access to finance for
small and mediumsized enterprises,
among other key
initiatives.
5
2007
2008
2012
2015
FSVC launches its
first major technical
assistance mission to
Sub-Saharan Africa,
in Malawi.
FSVC launches 5-year
program of technical
assistance in Iraq,
focused on building
the capacity of the
Central Bank of Iraq.
FSVC begins major
initiatives to strengthen
public financial
management across
North Africa and the
Middle East, as well as
Sub-Saharan Africa.
FSVC expands
work to promote
financial integrity,
including anti-money
laundering and
combating the
financing of terrorism,
in East Africa and in
Tunisia.
2010
2006
2011
2014
FSVC backstops
efforts of Former
U.S. Federal Reserve
Board Chairman
Paul Volcker, FSVC’s
Co-Chairman
during 1998-2005,
to provide economic
and financial policy
advice to Indonesia’s
leadership.
FSVC begins program
activity in Kenya,
Tanzania, Uganda,
Rwanda and Burundi,
launching a major
expansion of program
activity in Sub-Saharan
Africa.
FSVC re-engages
in Indonesia, establishes
new program to combat
financial corruption.
How FSVC
Provides Assistance
Request for
Technical
Assistance
Design of
Technical
Assistance
Recruitm
of Volunte
Experts
FSVC operates on a demanddriven basis, responding
to needs and requests for
assistance from leading
reformers and their institutions
in emerging market countries.
The demand-driven nature of
the work helps FSVC design
project activity that is highly
relevant and targeted to
address needs as defined by
the recipients themselves.
FSVC recruits ac
established finan
practitioners to p
requested techni
Importantly, the
serve as voluntee
helps ensure tha
is objective.
Recipients of FSVC
Assistance Include:
-- Central Banks
-- Regulatory Authorities
-- Ministries of Finance
-- Bank and Non-Bank Financial Institutions
-- Financial Sector Associations
-- Authorized Market Institutions, including Exchanges
-- Financial Intelligence Units (FIUs)
-- Small and Medium-Sized Enterprises (SMEs)
-- Civil Society Organizations and others
7
ment
eer
ctive and
ncial sector
provide the
ical assistance.
ese professionals
ers, which
at the advice
Delivery of
Technical
Assistance
Impact
and
Follow-Up
The recruited volunteer
experts travel to emerging
market countries to engage in
peer-to-peer exchanges with
local institutions to ensure a
rapid transfer of knowledge
and skills to achieve specific,
practical results.
FSVC conducts consistent
follow-up with local partners
to help them reach key
developmental objectives.
Paramount goals are to help
support entrepreneurship and
promote job creation to improve
the quality of life in emerging
market countries.
FSVC Impact
58
Countries
Assisted
2,950+ 15,700+ 9,300+
Projects
Completed
480,000+
Pro Bono Hours
Donated by Volunteers
Institutions
Served
Volunteers
Deployed
Key Areas of Expertise
Expanding
Access to
Finance
Combating Money
Laundering &
Terrorist Financing
Strengthening
Regulation &
Supervision
FSVC provides assistance to
help small and medium-sized
enterprises (SMEs) drive job
creation, competition and
innovation.
FSVC helps countries thwart
criminal activities and protect
the savings of citizens and their
businesses.
FSVC helps build the capacity
of central banks and regulatory
agencies to promote a sound
and competitive financial
sector.
FSVC’s work includes:
FSVC’s work includes:
FSVC’s work includes:
-- Introducing new policies at
financial institutions to lend
effectively to SMEs; and
-- Strengthening laws
and regulations;
-- Strengthening legal and
regulatory frameworks
to encourage safe and
competitive financial
activity; and
-- Helping SMEs build
business management
skills to secure loans.
-- Establishing new Financial
Intelligence Units; and
-- Introducing policies to
detect and deter suspicious
financial activity.
-- Training staff to ensure
the effective supervision
and examinations of
financial institutions.
9
Promoting
Capital Markets
Development
Expanding
Commercial
Banking
Strengthening
Public Financial
Management
FSVC helps strengthen capital
markets and their supervision
to create greater financing and
investment opportunities in the
emerging market world.
FSVC helps strengthen
banks’ capacity to provide the
credit and services that drive
development and economic
growth.
FSVC helps strengthen public
budgeting to improve the
capability of governments to
provide citizens with adequate
infrastructure and services.
FSVC’s work includes:
FSVC’s work includes:
FSVC’s work includes:
-- Introducing new products;
-- Promoting design of new
products and services; and
-- Introducing policies to
improve the transparent
management of public
financial resources; and
-- Strengthening laws and
regulations; and
-- Reducing risks and
bringing operations in
line with best practices.
-- Introducing effective
risk management and
credit analysis policies
and procedures.
-- Strengthening local advocacy
for open government policies.
The Value of Transforming
Financial Sectors
“Working toward transparent
financial systems that function
properly, with integrity at their
core, is crucially important for
developing economies. FSVC
is uniquely able, because of
its model, to provide urgently
needed strategic assistance
without bias or conflicts.”
Paul Volcker
Former U.S. Federal Reserve
Board Chairman and
FSVC Honorary Chairman
Courtesy of The Republican
“The Financial Services Volunteer
Corps is a Peace Corps for the
financial sector in developing
countries. The volunteers give
their time and their expertise to
establish a functioning market
economy in developing countries
around the world. The volunteers
are financial experts on these
issues, and they make lasting
friendships with the people they
assist. The Corps represents
the best of the American spirit
in carrying out this important
mission.”
Edward M. Kennedy
(1932- 2009)
U.S. Senator, Massachusetts
11
“FSVC’s work has been
instrumental in helping to move
Kenya’s efforts to combat money
laundering and terrorist financing
from theory to reality. The
conference that FSVC convened
with the Central Bank of Kenya
and the Bill & Melinda Gates
Foundation in 2011 was a pivotal
event that helped bring key
domestic financial leaders together
to support this important common
cause. FSVC’s work has helped
to translate ideas of financial
inclusion and financial stability
into actions, and also to transform
financial sectors in a most positive
way in East Africa.”
Njuguna Ndung’u
Courtesy of Gerald R. Ford School of Public
Policy, University of Michigan
“The work of the Financial
Services Volunteer Corps
is essential to establishing
institutions that anchor civil
society. What makes FSVC so
effective is that they enter a
country and work as partners with
their counterparts to strengthen
central banks, commercial
banks or even stock exchanges
to meet the highest international
standards. The fact that
volunteers provide the expertise,
and are therefore perceived to be
objective, only adds to their value.”
Dr. Henry Kissinger
Former U.S. Secretary of State
Former Governor of the Central
Bank of Kenya
“FSVC’s ability to help bring
international best practices
for small and medium-sized
enterprise lending to India has
directly impacted the capacity
for Indian banks to increase
lending to this segment of the
market, thereby boosting job
creation and economic growth,
and helping to alleviate
poverty in India.”
Nachiket Mor
Former Deputy Managing
Director of ICICI Bank India
The Impact of FSVC’s Work
Increasing
Access to
Finance
for Women
in Egypt
Through a series of projects in 2012 and 2013,
FSVC helped the Egyptian Social Fund for
Development (SFD) develop a strategic plan
and operational structure for a Gender Unit
that will provide financial and non-financial
assistance to women-owned micro, small and
medium-sized enterprises in Egypt. As a result
of FSVC’s assistance, the SFD established a
Gender Unit and developed financial products
for women in Egypt.
To date, SFD has disbursed approximately
US$33.7 million in funds to over 2,500 womenowned small enterprises, and disbursed
approximately US$43.9 million in funds to
over 75,000 women-owned micro-enterprises.
Thanks
to FSVC’s
Assistance,
SFD helped 2,500
women-owned
small enterprises
and 75,000
women-owned
micro-enterprises
13
Strengthening
Financial
Sector
of Russia
Over the course of the 1990s, FSVC became one of the most trusted
and effective providers of technical assistance to help strengthen
Russia’s banking and financial sectors. FSVC’s partnership with the
Central Bank of Russia (CBR) was extraordinary by any measure.
FSVC’s work included:
-- Designing the financial legal framework by providing
substantive input to nearly every piece of Russian banking
legislation, including the Law on the Central Bank
and the Law on the Commercial Banking Sector.
-- Strengthening the commercial banking sector of Russia by
training hundreds of young Russian commercial bankers
in the basics of risk management, credit origination,
asset and liability management, and related topics.
-- Helping to establish a deposit insurance system, providing the
CBR with the tools to review banks for acceptance into that
system, and helping the deposit insurance agency monitor
effectively the safety and soundness of accepted banks.
Lending
a Hand to
Women
Entrepreneurs
in India
The Self-Employed Women’s Association (SEWA) is the largest
women’s-based member organization in India. For over 40 years,
SEWA has promoted economic self-reliance by helping poor,
self-employed women develop profitable small businesses.
FSVC provided assistance to SEWA’s Trade Facilitation Centre
(STFC), which employs 3,500 women weavers, to help them expand
their ability to produce and market their wares to international
garment retailers. FSVC met with SEWA’s leadership teams to
discuss how to ensure that the STFC becomes a stand-alone,
for-profit entity that can grow and employ more women. FSVC also
met with women who were members of SEWA and customers.
Following these consultations, FSVC reviewed business plans
and provided key recommendations on organizational structure,
marketing approaches and techniques for recruiting experienced
management.
As a result of this technical assistance, SEWA was able to secure
a contract with international garment retailer Zara, which helped
women throughout India climb the economic ladder.
“The members of SEWA are
an admirable and talented
group of women who
already improved their lives
and those of their families
through hard work and
persistence. With some
additional guidance and
skills development, they
will be forming India’s small
businesses of tomorrow.”
- Carolyn Wendler,
FSVC volunteer expert
15
Combating Money
Laundering and Terrorist
Financing in Kenya
In 2011-2012, with support from the Bill &
Melinda Gates Foundation, FSVC examined how
to strengthen Kenya’s anti-money laundering/
combating the financing of terrorism (AML/
CFT) supervision without impeding its progress
in financial inclusion. FSVC and the Central
Bank of Kenya co-hosted a conference in Nairobi,
bringing together representatives from financial
institutions, regulatory authorities and members
of the international community. An FSVC report
summarizing the conference’s findings has been
widely circulated within Kenya and has been
instrumental in informing policymakers about
the need to strengthen Kenya’s AML/CFT regime.
Shortly after the FSVC report was
issued, Kenya successfully established
the Financial Reporting Centre,
Kenya’s Financial Intelligence Unit (FIU).
Increasing
Financial
Stability
of Indonesia
In the wake of the emerging market financial
crisis of 1998, FSVC experts provided
President Habibie of Indonesia with key
recommendations on the governance
and ownership of the Indonesian Bank
Restructuring Agency (IBRA), set up to manage
the enormous volume of problem assets that
had accumulated in the banking sector. FSVC
also backstopped the efforts of Former U.S.
Federal Reserve Board Chairman Paul Volcker,
FSVC’s Co-Chairman during 1998-2005, to
provide economic and financial policy advice to
the next Indonesian president, Abdurrahman
Wahid, and to the country’s economic and
financial leadership.
FSVC Volunteer Experts
FSVC’s programs are made possible by the selfless
dedication of thousands of volunteers who come
from a wide variety of institutions and backgrounds.
They generously give their time and knowledge to
help build better lives for people in transitional
and developing countries. By doing so, they help
build permanent bridges between the emerging
market world and the global financial system.
FSVC is particularly grateful for its exceptionally
strong relationship with major U.S. regulatory
institutions. The U.S. Federal Reserve System
and the U.S. Federal Deposit Insurance
Corporation (FDIC), in particular, have
been indispensable partners to FSVC.
FSVC volunteer expert (right) training
counterpart from Uganda.
Individual examples of dedication to FSVC’s
mission are too many to list. FSVC is fortunate
and proud to have such an impressive
roster of professionals from all over the
world participating in its missions.
FSVC volunteer expert (right) consulting
with counterpart in Albania.
FSVC volunteer expert (left) consulting
with counterpart in Tanzania.
17
Frank
Hartigan
John
Glazer
Harris
Berger
FDIC Secondee to FSVC
FSVC Volunteer Expert
FSVC Volunteer Expert
“FSVC staff took the time
to match my expertise and
talents with each opportunity.
There was a clear intent to use
Volunteer resources where
they were most needed.”
“FSVC provides opportunities
to work with practitioners on
the front lines of social and
economic change. It works to
address foundational issues,
but it is also personal because
the front lines of change are
populated by talented and
committed individuals working
to make possible changes
and opportunities that will
impact lives and shape the
future. FSVC aims to fill gaps
and address needs. I derive a
great deal from my efforts to
contribute to this process.”
“Training and consulting in the
developing world has been full
of unforgettable experiences.
It has been an opportunity to
hone teaching and mentoring
skills in credit and lending.
And it has been an interesting
discovery, especially to see
the shared approaches and
concerns among banking
institutions worldwide.”
Vice-Chairmen
Andrei Kozlov:
A Great FSVC
Counterpart and
Colleague
Andrei Kozlov
(1965 – 2006)
Former First Deputy
Chairman of the
Central Bank of Russia
“Andrei was a man of
Russia. But he was
more than that – a
man of courage, willing
and able to push for
change where change
was needed and at the
same time protecting
what is fundamentally
important – defending
the truth and a culture
of integrity.”
Paul A. Volcker
FSVC Honorary
Chairman
Andrei Kozlov, a visionary young member of
the management group at the Central Bank of
Russia (CBR), became a champion of banking
reform in Russia and a critically important
counterpart for FSVC. FSVC was privileged
to support the efforts of Kozlov throughout
the 1990s and early 2000s as he undertook
far-reaching reforms to strengthen the Russian
financial sector. These reforms pushed for
greater transparency in banks’ operations and
consistency in the CBR’s application of laws,
concepts that Kozlov embraced in an effort to
create a viable, world-class financial sector.
During the period 1999-2002, Kozlov served as
FSVC’s Managing Director in Moscow, where
he oversaw FSVC’s program to strengthen
the Russian financial sector. In 2002, Kozlov
returned to the CBR to become First Deputy
Chairman, a position from which he continued
to lead Russia’s banking reform efforts, serving
on the frontline of the fight against financial
crimes in Russia. Reflecting the inherent
danger of that work as well as his courage
and determination in the face of that danger,
he was assassinated in 2006. His legacy
will be lasting.
John L.
Walker
President,
FSVC Board of Directors,
1990 – 2005
FSVC Vice-Chairman,
2005 – 2015
Julian C.
Schroeder
FSVC Vice-Chairman,
2015 – Present
19
Board of Directors
Chairmen
William H. Donaldson
Chairman
Julian C. Schroeder
Vice-Chairman
J. Andrew Spindler
President & CEO
Stephen H. Axilrod
William J. Burns
Robert L. Clarke
Jill M. Considine
Kenneth W. Dam
John L. Douglas
Cyrus R.
Vance
John C.
Whitehead
FSVC Co-Chairman,
1990 – 1998
FSVC Co-Chairman and Chairman,
1990 – 2015
Paul A.
Volcker
William H.
Donaldson
FSVC Co-Chairman,
1998 – 2005
FSVC Chairman,
2015 – Present
Randall D. Guynn
Carla A. Hills
Allan J. Hirst
Reuben Jeffery III
Henry A. Kissinger
John L. Thornton
Josef Tošovský
Paul Tucker
John L. Walker
Where FSVC Works
1990 - 1995
Albania
Belarus
Bulgaria
Croatia
Czech Republic
Estonia
Hungary
Kyrgyz Republic
Latvia
Lithuania
Moldova
Mongolia
Poland
Romania
Russia
Slovakia
Slovenia
Ukraine
21
2015
Afghanistan
Albania
Algeria
Angola
Armenia
Azerbaijan
Bahrain
Bangladesh
Belarus
Bosnia
Bulgaria
Burundi
Cambodia
Cameroon
China
Croatia
Czech Republic
Egypt
Estonia
Georgia
Ghana
Hungary
India
Indonesia
Iraq
Jordan
Kazakhstan
Kenya
Kosovo
Kyrgyz Republic
Latvia
Lebanon
Libya
Lithuania
Macedonia
Malawi
Moldova
Mongolia
Morocco
Palestine
Philippines
Poland
Romania
Russia
Rwanda
Singapore
Slovakia
Slovenia
South Africa
Tanzania
Thailand
Tunisia
UAE
Uganda
Ukraine
Vietnam
Yemen
Zambia
FSVC
Financial
Services
Volunteer
Corps
2015
The Financial Services Volunteer Corps (FSVC) is a not-for-profit,
private-public partnership. FSVC helps to build sound and effective
financial sectors in emerging market countries. It does so with the
ultimate aim of promoting job creation, economic growth and a better
quality of life. FSVC achieves these objectives through promoting
the mobilization of savings for productive purposes and the spread
of entrepreneurship through small and medium-sized enterprises
(SMEs), among other means.
10 East 53rd Street, 36th Floor
New York, NY 10022
(212) 771-1400
www.fsvc.org
Twitter: @FSVCorg