The Financial System Assessment (FSA) isbased on the work of the joint International Monetary Fund(IMF)-World Bank Financial Sector Assessment Program (FSAP)updates that visited Belarus from September 17, 2007 toSeptember 30, 2008. The principal objective of the FSAPupdate was to assist the authorities in evaluating progress,assessing potential vulnerabilities of the financial system,and determining future challenges. The IMF and the WorldBank, an aide-memoire, technical notes on a detailedassessment of compliance with Basel Core Principles (BCP)principles of Banking supervision, summary assessment ofcompliance with the International Organization of SecuritiesCommissions (IOSCO) principles, and access to finance, andbackground notes on stress-testing and the insurance sectorhave been submitted to the authorities. Overall, thesupervisory framework for banks has significantly improvedsince the 2004 FSAP, though concerns remain in some crucialdimensions. The new Banking code was passed in 2006, andsecondary legislation is updated on a regular basis. Whilethe majority of recommendations made by the 2004 BCPassessment have been adopted or are in process ofimplementation, the independence of the National Bank ofRepublic of Belarus (NBRB) Board and bank supervisoryprocesses continue to pose operational and reputation risks.As well, the capital adequacy framework needs substantialimprovement to more accurately reflect the structure of thebanking sector. Supervisory actions could be significantlyenhanced by imposing adequate corporate governancerequirements for banks.