Balance Sheet Analysis in Fund Surveillance

Balance Sheet Analysis in Fund Surveillance
Author: International Monetary Fund
Publisher: International Monetary Fund
Total Pages: 50
Release: 2015-12-06
Genre: Business & Economics
ISBN: 1498344453

Balance sheets convey vital information about economic prospects and risks. Balance sheet analysis captures the role that financial frictions and mismatches play in creating fragility and amplifying shocks. This is key to understanding the macroeconomic outlook, identifying vulnerabilities, and tracing the transmission of potential shocks and policies. This paper reviews the use of balance sheet analysis in the Fund’s bilateral surveillance and introduces some practical examples of how it can be deepened. Recent evaluations of IMF surveillance––including the 2014 TSR––have emphasized the importance of strengthening balance sheet analysis and coverage of macro-financial issues. This paper is a first step that highlights useful examples of such analysis conducted by staff over the last decade, documents the data and tools that have been used, and mentions some limitations. In addition, it discusses recent improvements in the coverage and quality of balance sheet data through initiatives launched in the wake of the global crisis, as well as key remaining gaps, addressing which requires international collaboration.

Balance Sheet Network Analysis of Too-Connected-to-Fail Risk in Global and Domestic Banking Systems

Balance Sheet Network Analysis of Too-Connected-to-Fail Risk in Global and Domestic Banking Systems
Author: Mr.Jorge A. Chan-Lau
Publisher: International Monetary Fund
Total Pages: 27
Release: 2010-04-01
Genre: Business & Economics
ISBN: 1455200662

The 2008/9 financial crisis highlighted the importance of evaluating vulnerabilities owing to interconnectedness, or Too-Connected-to-Fail risk, among financial institutions for country monitoring, financial surveillance, investment analysis and risk management purposes. This paper illustrates the use of balance sheet-based network analysis to evaluate interconnectedness risk, under extreme adverse scenarios, in banking systems in mature and emerging market countries, and between individual banks in Chile, an advanced emerging market economy.

Cross-Border Financial Surveillance

Cross-Border Financial Surveillance
Author: Marco A Espinosa-Vega
Publisher: International Monetary Fund
Total Pages: 29
Release: 2010-04-01
Genre: Business & Economics
ISBN: 1455200646

Effective cross-border financial surveillance requires the monitoring of direct and indirect systemic linkages. This paper illustrates how network analysis could make a significant contribution in this regard by simulating different credit and funding shocks to the banking systems of a number of selected countries. After that, we show that the inclusion of risk transfers could modify the risk profile of entire financial systems, and thus an enriched simulation algorithm able to account for risk transfers is proposed. Finally, we discuss how some of the limitations of our simulations are a reflection of existing information and data gaps, and thus view these shortcomings as a call to improve the collection and analysis of data on cross-border financial exposures.

Financial Soundness Indicators

Financial Soundness Indicators
Author: International Monetary Fund
Publisher: International Monetary Fund
Total Pages: 302
Release: 2006-04-04
Genre: Business & Economics
ISBN: 1589063856

Financial Soundness Indicators (FSIs) are measures that indicate the current financial health and soundness of a country's financial institutions, and their corporate and household counterparts. FSIs include both aggregated individual institution data and indicators that are representative of the markets in which the financial institutions operate. FSIs are calculated and disseminated for the purpose of supporting macroprudential analysis--the assessment and surveillance of the strengths and vulnerabilities of financial systems--with a view to strengthening financial stability and limiting the likelihood of financial crises. Financial Soundness Indicators: Compilation Guide is intended to give guidance on the concepts, sources, and compilation and dissemination techniques underlying FSIs; to encourage the use and cross-country comparison of these data; and, thereby, to support national and international surveillance of financial systems.

Understanding Financial Accounts

Understanding Financial Accounts
Author: OECD
Publisher: OECD Publishing
Total Pages: 424
Release: 2017-11-06
Genre:
ISBN: 9264281282

Understanding Financial Accounts seeks to show how a range of questions on financial developments can be answered with the framework of financial accounts and balance sheets, by providing non-technical explanations illustrated with practical examples.

Flow-of-Funds Analysis

Flow-of-Funds Analysis
Author: John C. Dawson
Publisher: M.E. Sharpe
Total Pages: 778
Release: 1996-06-27
Genre: Business & Economics
ISBN: 9780765634498

This is a collection of articles on the flow of funds that attempts to serve as a reference guide to economists in academia, business, finance and government. Flow of funds analysis is widely used in analysis of financial institutions and markets. In fact, they were largely constructed by the Federal Reserve and other central banks and were the foundations for defining and measuring the various concepts of the monetary aggragates used as key targets by central banks in carrying out monetary policy. The book brings together the scattered articles on the subject and should be useful as a research guide and teaching source.

Off-Balance Sheet Activities

Off-Balance Sheet Activities
Author: Joshua Ronen
Publisher: Bloomsbury Publishing USA
Total Pages: 192
Release: 1990-11-30
Genre: Business & Economics
ISBN: 0313366683

The objective of Off-Balance Sheet Activities is to gain insights into, and propose meaningful solutions to, those issues raised by the current proliferation of off-balance sheet transactions. The book has its origins in a New York University conference that focused on this topic. Jointly undertaken by the Vincent C. Ross Institute of Accounting Research and New York University's Salomon Center for the study of Financial Institutions at the Stern School of Business, the conference brought together academic researchers and practitioners in the field of accounting and finance to address the issues with the broad-mindedness requisite of a group whose approaches to solutions are as different from each other as their respectively theoretical and applied approaches to the disciplines of finance and accounting. The essays are divided into two sections. The first covers issues surrounding OBS activities and banking and begins with a brief introduction that places the essays into context. OBS activities and the underinvestment problem, whether loan sales are really OBS, and money demand and OBS liquidity are examined in detail. Section two, which also begins with a brief introduction, focuses on issues of securitized assets and financing. A report on recognition and measurement issues in accounting for securitized assets is followed by three separate discussion essays. Other subjects covered include contract theoretic analysis of OBS financing, the use of OBS financing to circumvent financial covenant restrictions, and debt contracting and financial contracting. The latter two contributions are also followed by discussion essays. This unique collection of papers will prove to be an interesting and valuable tool for accounting and finance professionals as well as for academics involved in these fields. It will also be an important addition to public, college, and university libraries.

Interconnectedness and Contagion Analysis: A Practical Framework

Interconnectedness and Contagion Analysis: A Practical Framework
Author: Mrs.Jana Bricco
Publisher: International Monetary Fund
Total Pages: 49
Release: 2019-10-11
Genre: Business & Economics
ISBN: 1513517856

The analysis of interconnectedness and contagion is an important part of the financial stability and risk assessment of a country’s financial system. This paper offers detailed and practical guidance on how to conduct a comprehensive analysis of interconnectedness and contagion for a country’s financial system under various circumstances. We survey current approaches at the IMF for analyzing interconnectedness within the interbank, cross-sector and cross-border dimensions through an overview and examples of the data and methodologies used in the Financial Sector Assessment Program. Finally, this paper offers practical advice on how to interpret results and discusses potential financial stability policy recommendations that can be drawn from this type of in-depth analysis.