Integrating Stability Assessments Under the Financial Sector Assessment Program into Article IV Surveillance - Revised Proposed Decision PDF Download
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Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1498336922
Category : Business & Economics
Languages : en
Pages : 6
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Book Description
Recognizing the important impact that a member’s domestic economic and financial policies can have on systemic stability, Article IV of the IMF’s Articles of Agreement establishes obligations for members respecting the conduct of these policies, including their financial sector policies. An examination of members’ financial sector policies is important in all cases of bilateral surveillance, and three quarters of the Fund’s membership has already undergone a financial stability assessment. With this Decision, the Fund decides that, taking into account the framework described above and the overall purpose of surveillance, heightened scrutiny should be given in bilateral surveillance to the financial sector policies of those members whose financial sectors are systemically important, given the risk that domestic and external instability in such countries will lead to particularly disruptive exchange rate movements and undermine systemic financial and economic stability. The mandatory financial stability assessments undertaken under this Decision will consist of the following elements: a) an evaluation of the source, probability, and potential impact of the main risks to macro-financial stability in the near-term for the relevant financial sector; b) an assessment of the authorities’ financial stability policy framework; and c) an assessment of the authorities’ capacity to manage and resolve a financial crisis should the risks materialize.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1498336922
Category : Business & Economics
Languages : en
Pages : 6
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Book Description
Recognizing the important impact that a member’s domestic economic and financial policies can have on systemic stability, Article IV of the IMF’s Articles of Agreement establishes obligations for members respecting the conduct of these policies, including their financial sector policies. An examination of members’ financial sector policies is important in all cases of bilateral surveillance, and three quarters of the Fund’s membership has already undergone a financial stability assessment. With this Decision, the Fund decides that, taking into account the framework described above and the overall purpose of surveillance, heightened scrutiny should be given in bilateral surveillance to the financial sector policies of those members whose financial sectors are systemically important, given the risk that domestic and external instability in such countries will lead to particularly disruptive exchange rate movements and undermine systemic financial and economic stability. The mandatory financial stability assessments undertaken under this Decision will consist of the following elements: a) an evaluation of the source, probability, and potential impact of the main risks to macro-financial stability in the near-term for the relevant financial sector; b) an assessment of the authorities’ financial stability policy framework; and c) an assessment of the authorities’ capacity to manage and resolve a financial crisis should the risks materialize.
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN: 1498336930
Category : Business & Economics
Languages : en
Pages : 31
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Book Description
Integration of financial sector issues into bilateral surveillance has been a long-standing challenge. Financial stability is a key component of the domestic and external stability of members and is important for the promotion of the “stable system of exchange rates” envisaged under Article IV. But although financial sector issues and policies are at the core of the Fund’s surveillance mandate, their effective integration has been a challenge. To address this challenge, it is proposed to adopt a more risk-based approach to financial sector surveillance by making FSAP stability assessments part of Article IV surveillance for members with systemically important financial sectors.
Author: International Monetary Fund. Strategy, Policy, & Review Department
Publisher: International Monetary Fund
ISBN: 1498341063
Category : Business & Economics
Languages : en
Pages : 38
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Book Description
In September 2010, the Executive Board made financial stability assessments under the Financial Sector Assessment program (FSAP) a regular and mandatory part of bilateral surveillance under Article IV for jurisdictions with systemically important financial sectors. This decision recognized that although financial sector issues were at the core of the Fund’s surveillance mandate, the FSAP as designed in the late 1990s had severe limitations as a tool. Voluntary participation, the low frequency of assessments, and their very broad coverage (particularly in emerging market and developing countries, where assessments are typically conducted jointly with the World Bank) limited the usefulness of the FSAP for surveillance. Building on the revamp of the FSAP during the 2009 program review that delineated the institutional responsibilities of the Fund and the World Bank and defined the content of the stability assessment under the FSAP, the Executive Board took the next step in 2010 to make these stability assessments mandatory every five years for members with systemically important financial sectors
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 66
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Book Description
Ireland has considerably strengthened financial sector regulation and supervision since the 2016 FSAP, aided by the ECB/SSM, and is working with European and international regulators to strengthen oversight of the large market-based finance (MBF) sector. This strengthening is evidenced by a successful navigation through the challenges of Brexit and the pandemic. Despite global headwinds, Ireland is exiting the pandemic with strong economic growth and a highly capitalized and liquid banking system. The financial system has grown rapidly and in complexity, especially after Brexit, and Ireland has become a European base for large financial groups. The MBF sector has grown to the second largest in Europe, with global interlinkages.
Author: International Monetary
Publisher: International Monetary Fund
ISBN: 1513583905
Category : Business & Economics
Languages : en
Pages : 74
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Book Description
The Financial Sector Assessment Program (FSAP) Provides In-Depth Assessments Of Financial Sectors. FSAPs Are Usually Conducted Jointly With The World Bank In Emerging Market And Developing Economies And By The Fund Alone In Advanced Economies. Fsaps Provide Valuable Analysis And Policy Recommendations For Surveillance And Capacity Development. Since The Program’s Inception, 157 Fund Members Have Undergone Individual Or Regional Fsaps. In Recent Years, The Fund Has Been Conducting 12–14 Fsaps Per Year At A Cost Of About 3 Percent Of The Fund’s Direct Spending.
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN: 1475554613
Category : Business & Economics
Languages : en
Pages : 61
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Book Description
This paper discusses the findings of the Financial System Stability Assessment for Sweden. The Swedish financial system is large and highly interconnected, putting a premium on the accompanying policy framework. Relative to the size of the domestic economy, the financial system is among Europe’s largest. It features complex domestic and international linkages, reflecting Sweden’s role as a regional financial hub. However, the macrofinancial risks have grown since 2011, for example the rising share of highly indebted households. Stress tests also suggest that banks and nonbanks are largely resilient to solvency shocks, but concerns persist about the ability of bank models to capture unexpected losses.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1475504233
Category : Business & Economics
Languages : en
Pages : 77
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Book Description
This report summarizes the findings of the Financial Sector Assessment Program (FSAP) Update for Spain. Although there is a core of strong banks that are well managed and appear resilient to further shocks, vulnerabilities remain. Substantial progress has been made in reforming the former savings banks, and the most vulnerable institutions have either been resolved or are being restructured. Recent measures address the most problematic part of banks’ portfolios. Moving ahead, a further restructuring and recapitalization of some of the remaining weaker banks may be needed as a result of deteriorating economic conditions.
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN: 1498321119
Category : Business & Economics
Languages : en
Pages : 85
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Book Description
This Financial System Stability Assessment paper discusses that Canada has enjoyed favorable macroeconomic outcomes over the past decades, and its vibrant financial system continues to grow robustly. However, macrofinancial vulnerabilities—notably, elevated household debt and housing market imbalances—remain substantial, posing financial stability concerns. Various parts of the financial system are directly exposed to the housing market and/or linked through housing finance. The financial system would be able to manage severe macrofinancial shocks. Major deposit-taking institutions would remain resilient, but mortgage insurers would need additional capital in a severe adverse scenario. Housing finance is broadly resilient, notwithstanding some weaknesses in the small non-prime mortgage lending segment. Although banks’ overall capital buffers are adequate, additional required capital for mortgage exposures, along with measures to increase risk-based differentiation in mortgage pricing, would be desirable. This would help ensure adequate through-the cycle buffers, improve mortgage risk-pricing, and limit procyclical effects induced by housing market corrections.
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN: 1475577737
Category : Business & Economics
Languages : en
Pages : 118
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Book Description
This paper evaluates the risks and vulnerabilities of the German financial system and reviews both the German regulatory and supervisory framework and implementation of the common European framework insofar as it is relevant for Germany. The country is home to two global systemically important financial institutions, Deutsche Bank AG and Allianz SE. The system is also very heterogeneous, with a range of business models and a large number of smaller banks and insurers. The regulatory landscape has changed profoundly with strengthened solvency and liquidity regulations for banks (the EU Capital Requirements Regulation and Directive IV), and the introduction of macroprudential tools.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1498342841
Category : Business & Economics
Languages : en
Pages : 49
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Book Description
The Financial Sector Assessment Program (FSAP), established in 1999, is an in-depth assessment of a country’s financial sector. It is an important element of the Fund’s surveillance and provides input to the Article IV consultations. In developing and emerging market countries, FSAP assessments are usually conducted jointly with the World Bank and include two components: a financial stability assessment (the main responsibility of the Fund) and a financial development assessment (the main responsibility of the World Bank). Each FSAP concludes with the preparation of a Financial System Stability Assessment (FSSA), which focuses on issues of relevance to IMF surveillance and is discussed by the IMF Executive Board normally together with the country’s Article IV staff report. Since the program’s inception, 144 member countries have requested and undergone FSAPs, most of them more than once. In recent years, the Fund has been conducting 14–16 FSAPs per year at an annual cost of US$13–15 million. The last review of the FSAP in 2009, in the aftermath of the global financial crisis, introduced a number of far-reaching reforms that have clarified the responsibilities of the Fund and the Bank in developing and emerging market countries, where assessments usually take place jointly, established institutional accountability, strengthened the analytical focus and coverage of FSAPs, and introduced the option of modular assessments that has afforded the Fund and national authorities greater flexibility on the scope and timing of assessments. In 2010, the financial stability assessment under the FSAP in 25 jurisdictions with financial sectors deemed by the Fund to be systemically important became a mandatory part of Article IV surveillance, expected to take place every five years. The list was expanded to 29 jurisdictions in 2013. For all other jurisdictions, FSAP participation continues to be voluntary.In 2010, the financial stability assessment under the FSAP in 25 jurisdictions with financial sectors deemed by the Fund to be systemically important became a mandatory part of Article IV surveillance, expected to take place every five years. The list was expanded to 29 jurisdictions in 2013. For all other jurisdictions, FSAP participation continues to be voluntary.
