The tranche conditions were overloaded with complicated policy reforms and involved too many implementing agencies with different interests, overstretching the weak administrative capacity of the government. Policy conditions included adherence to complicated and lengthy governance agreement agreements; legislative reforms, among them, amendments to the Secured Transactions Law, the Law on (Civil) Judgment Enforcement, the Law on Civil Procedure, and the Anti-Money Laundering Law; the establishment of a financial intelligence unit at the BOL; and the placement of recapitalization bonds at the two SOCBs. A governance agreement to insulate a state bank from political interference was a relatively new instrument; its use in the Lao PDR was therefore tantamount to an experiment.
Banking Sector Reform Program