“Surfing Through the Crisis” – Implications of Debt Restructuring Process to the Financial Services Sector

EY Sri Lanka, is scheduled to host a discussion ‘Debt Restructuring Implications to the Financial Services Sector’, on the 22 March 2023 from 08:45 am to 12:30 pm at The Kingsbury Colombo. The session branching under the theme, ‘Surfing through the Crisis’, is designed specifically for CEOs, CFOs, and CRO of the financial sector, as well as the chairpersons of the Audit Committee and the Board Integrated Risk Management Committee. The event hopes to create value for Sri Lanka’s financial sector amidst the prevailing economic challenges. As the largest service providers to the financial sector in terms of audits, tax, consultancy, and strategy & transaction, EY Sri Lanka feels compelled to assist the financial sector as they navigate the challenges of the economic crisis.

Despite the expected positive outcomes of debt restructuring, the process itself can be painful for the country, financial institutions, debtors and creditors. To the financial services sector specifically it could bring several challenges to capital management, financial reporting, Credit Risk and Liquidity Risk management strategies.

This session will explore these implications, under two technical segments, from Risk Management and Accounting lenses, and the mechanisms required for an effective transition. From a Risk Management perspective there will be several simulations on how it affects the financial institution’s capital and profitability whilst the accounting perspective will include discussions relating to how the debt restructuring process shall be accounted for in line with SLFRS 9 Financial Instruments.

The session will further cover Sovereign Domestic Debt Restructuring process, a method that has become frequent especially in developing countries that have undergone financial crises or economic downturn. As per the IMF, significant number of these restructuring in the past two decades involved domestic debt. This discussion will consider multiple perspectives including technical, risk and accounting, based on publicly available data through IMF working papers, the strategies and frameworks generally followed to determine the domestic debt restructure as a part of an effort to reduce the overall public debt.

The event will be conducted by Mr. Manil Jayesinghe Country Managing Partner of EY Sri Lanka and Maldives, and Mr. Rajith Perera Partner Financial Accounting Advisory Services EY Sri Lanka. To register for the session, or for further inquiries please contact Nurani Rajapaksha (Nurani.Rajapaksha@lk.ey.com)