graduation project Proposal

COLLEGE OF BANKING AND FINANCIAL STUDIES

DEPARTMENT OF UNDERGRADUATE STUDIES

RESEARCH PROJECT -1

RESEARCH PROPOSAL

Student Name	Aala Khalid Al alawi
Student ID	St09210
Course (BAAF/BBA)	BAAF
Date of Submission
Shift	Morning/Evening
Semester Duration	Summer 2020-21
Semester Number	7
Start date	04 July 2021
Deadline – Formative Submission	08 August 2021
Deadline – Summative Submission	15 August 2021
Assessor Name	Dr. Vidya Suresh

1. Title of the Research (Title should contain a problem/issue, company/organization/sector and a place of study. Word limit 05- 20)

The role of central bank of Oman in ensuring financial stability.

Good

2. Subject Area of Research (Mention the area of research like General management, Finance, Social sciences, Strategy, Technology & Science, Education, Accounting, Auditing, HR & OB. Mention any one subject area. Word limit 01- 05)

Finance, macroeconomics

3. Introduction (Introduction/ background/ general information of your research. What your research is about. Write about the issue/problem. The concept related to your problem/research. What is the relevance of the problem to the organization/sector/company and place? Word limit 300- 600)

Financial stability has several definitions. Most of them agree that financial stability refers to the absence of system-wide incidents in which the financial system fails to operate (crises). It's also about the financial system's ability to withstand stress. Financial systems that are stable are capable of efficient resource allocation and risk management, keeping employment levels close to the economy's natural rate, and avoiding relative price changes in real or financial assets that might impact monetary stability or employment levels.

To preserve monetary and financial stability in the Sultanate of Oman, the Central Bank of Oman is responsible for developing a healthy and advanced banking and financial system in the country conducive to its continued economic development. Prices and trust in the currency are indicators of financial stability. Detecting and mitigating risks to the financial system as a whole is necessary for financial stability. The Central bank of Oman is also the country's only integrated banking and financial services regulator. A variety of duties are performed by the central bank of Oman in order to attain these goals, as specified by Banking Laws 1974.

As a result of the Banking Law of 2000, the Central Bank of Oman (CBO) was established "to guarantee financial stability." When the CBO created an autonomous Financial Stability function in 2011, it was in accordance with worldwide best practices and the concept of financial stability was given more importance in the Sultanate. FSR offers assistance to regulators, the government, and market players with the goal of identifying vulnerabilities and protecting infrastructure, institutions, and other components of the Omani financial system. The prudential regulatory and supervisory structure is now in place on both a micro and macro level. The on-site inspection framework has completed its gradual transition to a better supervisory regime, Risk Based Supervision (RBS). Global capital and liquidity standards have been updated and are now being followed. When it comes to systemic risks, the Financial Stability Department (FSD) regularly monitors and analyzes them from the perspective of the financial-economic system and foreign variables that might have an impact. To help shape Oman's financial-economic regulatory philosophy, a Joint Financial Stability Committee was created. Among its members are the CBO's executive president, the Capital Market Authority's executive president, and other top government officials. Strengthen financial regulatory coordination and develop surveillance structure that can monitor and report on market movements as well as financial stability problems.

Article 1(a) of the Banking Law states one of the objectives of the Law to be as under: “Promote the development of banking institutions which will ensure the maintenance of monetary and financial stability, contribute to the economic, industrial and financial growth and enhance the position of the Sultanate in international financial affairs”. In this research I would be talking about the role of central bank of Oman and how to ensuring financial stability through Oman’s financial system, the use of licensing of financial institutions ,regulatory framework, supervisory framework and lastly they anti-money laundering and combat financial terrorism.

4. Literature Review (References from articles/newspapers/web sources/trade magazines/books related to your topic. Use Harvard referencing style. It is a documentation of a comprehensive review of published and unpublished work from secondary sources that is relevant to your topic. Word limit 800- 1000)

The autonomy of many central banks has increased in recent years, as has the transfer of supervisory and regulatory tasks to other institutions. All central banks, however, have a basic role of maintaining financial stability (Sinclair, 2005).It was assumed that the central bank's primary job was financial stability. Indeed, monetary policy, financial stability, and banking supervision are all intertwined and difficult to separate (Gaspar, Hartmann and Sleijpen, 2002).

Many central banks and other organizations have begun issuing monthly reports on financial stability to demonstrate their increased attention on financial stability. It demonstrates how to execute the framework and uses the findings to identify widespread behaviors, recent trends, and opportunities for improvement (Čihák, 2006). concentrate on new financial stability committees (FSCs), the number of which has increased rapidly since the global financial crisis, and their interactions with central banks and other countries? expressed preferences for effectiveness above issues of political economy (Edge and Liang, 2019).

Which duties for financial stability have been entrusted to central banks (CBs), how these tasks are carried out, and if democratic accountability procedures are in place (Oosterloo and de Haan, 2004)? The two most pressing concerns in today's financial markets are the origins of the previous financial crisis and how to avoid future catastrophes. This book tackles the latter, emphasizing a significant change in most nations toward a better understanding of financial stability and how to attain it. The contributions in this book, in particular, explore the recent shift in emphasis at central banks toward financial stability (Evanoff et al., 2013).

Starting with an examination of the aims and instruments of financial regulation, concepts for the construction of financial stability frameworks are presented (Nier, 2009). financial stability may be achieved by self-regulation under a system of private banks without a central bank Other banks will step in if one bank overextends itself, preventing a systemic meltdown. It is in the interest of the banks to ensure an orderly settlement of bankruptcy or illiquidity situations. When Selgin looks at 'free banking', he draws on examples from Scotland and Canada (Selgin, Dowd and Bédard, 2018).

Analysis of the relationship between the emotion conveyed in central bank financial stability reports and the financial cycle (Correa et al., 2020). A growing number of central banks have expanded their attention on financial stability over the past several years as demonstrated by the increasing number of financial stability reports produced by central banks. It focuses on central banks' involvement in financial stability and the concept of financial stability, as well as the goals of financial stability reports and their role in central banks' responsibility, as well as the overall evaluations provided in these reports (Čihák, 2007).

5. Significance of the research (Why the research is needed. What is the significance/importance of this research? Word limit 15- 30)

Oman’s central bank plays a key role in ensuring the financial sector's resilience and protecting it from any negative impacts on financial stability, which makes this research extremely important.

6. Objectives of the research (points/bullets limit 1- 5)

1- To identify the challenges in ensuring finical stability

2- Identify financial stability risks

3- The effect of being financially unusable

4- Maintaining the financial stability

7. Research Questions OR Research Problem (points/bullets limit 1- 5)

1- What could be the challenges that faces CBO in ensuring the financial stability of the country?

2- What could be the risks that faces CBO and how could they be avoided?

3- What would happen if the county was financially unstable?

4- How does CBO maintains being financially stable?

8. Research hypotheses (assumptions/ your opinions on your area of research, which is yet to be proven. Points/bullets limit 1- 5)

The strategy of central bank of Oman to maintain financial stability. good …. okay

9. Research Methodology

9.1. Research Design (What question are you going to study? What data are relevant/ Who are your target respondents? What type of data are you going to collect? Will it be quantitative/qualitative/mixed? Word limit 50- 200)

The following research questions will be discussed in the research.

1- What is the importance of CBO in financial stability ?

2- What is omans financial system ?

3- Why is licensing of financial institutions important?

4- Why is regulatory framework and supervisory framework important and what the difference between them?

5- Why anti-money laundering and combat financial terrorism could affect financial stability?

9.2. Data collection methods (Will the data be primary or secondary? What tools are you going to use to collect data? Will it be Questionnaire/survey, Focus group interviews, Discussions, Observation? Word limit 10- 50)

Primary and secondary data collection approaches will be used. The primary data will be gathered from the intended respondents via a survey. Secondary information will be gathered from web sites. This study employs a hybrid approach to data collecting.

9.3. Sampling frame (Who will be your sample or respondents. The designations of people eg. Managers, Officers, Customers, IT staff. Mention sample size- how many people will you interview. Word limit 10- 50)

The sample respondents are 20 employees. A mixture between managers and staff. ( okay, but who will be your respondents, employees from Bank, I guess? Then which bank?)

9.4. Data analysis approach (Types of charts/tables/analysis using SPSS/EXCEL, Word limit 10-50)

Tables, graphs, and charts will be used to present the material in this study.

10. Research Limitation (area of research to be specified, for example, this study is limited only to Muscat/ Sohar. How many branches/ how many people you are covering in this research. Is it on local/ national/ regional/international level? Word limit 10-50)

This study focuses solely on the central bank of Oman. This study would involve 20 participants. (would you be allowed to take interview from employees from CBO?

If not, its advisable to use only secondary data. That would be good enough to do a good project.

11. Research Structure (sections/units in your research project. Word limit 50-150)

This research would have a clear heading and with the table of conduct that includes

1- Introduction

2- Literature review

3- Methodology

4- Conclusion

5- Reference

12. Outline of proposed activities for RP-2 (Implementation plan, timelines and milestones)

Stages	Months (fill it below)
	aug	sep	oct	nov	dec	jan
1. Introduction
2. Literature Review
3. Questionnaire design
4. Sampling Frame
3. Data Collection
5. Data coding and entry
4. Data Analysis
5. Discussion/Conclusion
6. Final Report

13. References (Use Harvard referencing style and provide here minimum 10 references that you used to write your proposal. Point/bullet limit 10-30).

cbo.gov.om. (n.d.). Central Bank Of Oman - Financial Stability in the Sultanate of Oman. [online] Available at: https://cbo.gov.om/Pages/FinancialStability.aspx [Accessed 16 Aug. 2021].

Čihák, M. (2006). How Do Central Banks Write on Financial Stability? [online] papers.ssrn.com. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=920255 [Accessed 16 Aug. 2021].

Čihák, M. (2007). Central Banks and Financial Stability: A Survey. [online] papers.ssrn.com. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=998335 [Accessed 16 Aug. 2021].

Correa, R., Garud, K., Londono, J.M. and Mislang, N. (2020). Sentiment in Central Banks’ Financial Stability Reports*. Review of Finance.

Edge, R.M. and Liang, N. (2019). New Financial Stability Governance Structures and Central Banks. [online] papers.ssrn.com. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3361051 [Accessed 16 Aug. 2021].

Evanoff, D.D., Holthausen, C., Kaufman, G.G. and Kremer, M. (2013). Role Of Central Banks In Financial Stability, The: How Has It Changed? [online] Google Books. World Scientific. Available at: https://books.google.com.om/books?hl=en&lr=&id=vwS7CgAAQBAJ&oi=fnd&pg=PA11&dq=financial+stability+in+central+banks&ots=wF6CbDeJV5&sig=ugrjP5oG_BXOiul_ObnnfpPmHCU&redir_esc=y#v=onepage&q=financial%20stability%20in%20central%20banks&f=false [Accessed 16 Aug. 2021].

Gaspar, V., Hartmann, P. and Sleijpen, O. (2002). Second ECB Central Banking Conference. [online] . Available at: https://www.ecb.europa.eu/pub/pdf/other/transformationeuropeanfinancialsystemen.pdf#page=270 [Accessed 16 Aug. 2021].

Nier, E.W. (2009). Financial Stability Frameworks and the Role of Central Banks: Lessons From the Crisis. IMF Working Papers, [online] 2009(070). Available at: https://www.elibrary.imf.org/view/journals/001/2009/070/article-A001-en.xml [Accessed 16 Aug. 2021].

Oosterloo, S. and de Haan, J. (2004). Central banks and financial stability: a survey. Journal of Financial Stability, [online] 1(2), pp.257–273. Available at: https://www.sciencedirect.com/science/article/pii/S1572308904000221 [Accessed 16 Aug. 2021].

Selgin, G., Dowd, K. and Bédard, M. (2018). Financial Stability without Central Banks. [online] Google Books. Do Sustainability. Available at: https://books.google.com.om/books?hl=en&lr=&id=OZCCDwAAQBAJ&oi=fnd&pg=PR7&dq=financial+stability+in+central+banks&ots=UXHgRcdAIo&sig=8fAxNj4Aj_NGf6zXphkQBb3poX0&redir_esc=y#v=onepage&q=financial%20stability%20in%20central%20banks&f=false [Accessed 17 Aug. 2021].

Sinclair, P.J.N. (2005). Central Banks and Financial Stability. [online] papers.ssrn.com. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=764428 [Accessed 18 Aug. 2021].

World Bank. (2016). Financial Stability. [online] Available at: https://www.worldbank.org/en/publication/gfdr/gfdr-2016/background/financial-stability.

14. Code of Ethics & Learner Declaration

This is my own research and I am not infringing into copyright, ethics or confidentiality issues. I have taken care of health, safety, environmental issues and governmental policies I, certify that this assignment is my own work and not copied or plagiarized. It has not previously been submitted as part of any assessment for this qualification. All the sources, from which information has been obtained for this assignment, have been referenced. I further certify that I have read and understood the College of Banking and Financial Studies rules and regulations about plagiarism and I agree to be bound by them.

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