Mandatory Financial Stability Assessments Under The Financial Sector Assessment Program Update
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| Author | : International Monetary Fund. Strategy, Policy, & Review Department |
| Publisher | : International Monetary Fund |
| Total Pages | : 38 |
| Release | : 2013-11-18 |
| Genre | : Business & Economics |
| ISBN | : 1498341063 |
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 |
| Total Pages | : 66 |
| Release | : 2022-07-07 |
| Genre | : Business & Economics |
| ISBN | : |
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 Fund. Monetary and Capital Markets Department |
| Publisher | : International Monetary Fund |
| Total Pages | : 85 |
| Release | : 2019-06-24 |
| Genre | : Business & Economics |
| ISBN | : 1498321119 |
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 | : Mr.Tobias Adrian |
| Publisher | : International Monetary Fund |
| Total Pages | : 73 |
| Release | : 2020-02-05 |
| Genre | : Business & Economics |
| ISBN | : 1513520741 |
This paper explains specifics of stress testing at the IMF. After a brief section on the evolution of stress tests at the IMF, the paper presents the key steps of an IMF staff stress test. They are followed by a discussion on how IMF staff uses stress tests results for policy advice. The paper concludes by identifying remaining challenges to make stress tests more useful for the monitoring of financial stability and an overview of IMF staff work program in that direction. Stress tests help assess the resilience of financial systems in IMF member countries and underpin policy advice to preserve or restore financial stability. This assessment and advice are mainly provided through the Financial Sector Assessment Program (FSAP). IMF staff also provide technical assistance in stress testing to many its member countries. An IMF macroprudential stress test is a methodology to assess financial vulnerabilities that can trigger systemic risk and the need of systemwide mitigating measures. The definition of systemic risk as used by the IMF is relevant to understanding the role of its stress tests as tools for financial surveillance and the IMF’s current work program. IMF stress tests primarily apply to depository intermediaries, and, systemically important banks.
| Author | : International Monetary Fund. Monetary and Capital Markets Department |
| Publisher | : International Monetary Fund |
| Total Pages | : 118 |
| Release | : 2016-06-29 |
| Genre | : Business & Economics |
| ISBN | : 1475577737 |
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. Fiscal Affairs Dept. |
| Publisher | : International Monetary Fund |
| Total Pages | : 64 |
| Release | : 2013-10-06 |
| Genre | : Business & Economics |
| ISBN | : 1498341713 |
The countercyclical capital buffer (CCB) was proposed by the Basel committee to increase the resilience of the banking sector to negative shocks. The interactions between banking sector losses and the real economy highlight the importance of building a capital buffer in periods when systemic risks are rising. Basel III introduces a framework for a time-varying capital buffer on top of the minimum capital requirement and another time-invariant buffer (the conservation buffer). The CCB aims to make banks more resilient against imbalances in credit markets and thereby enhance medium-term prospects of the economy—in good times when system-wide risks are growing, the regulators could impose the CCB which would help the banks to withstand losses in bad times.
| Author | : Tobias Adrian |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2020 |
| Genre | : |
| ISBN | : |
In a recently released New York Fed staff report, we present a forward-looking monitoring program to identify and track time-varying sources of systemic risk.
| Author | : Mr.Robert M Heath |
| Publisher | : International Monetary Fund |
| Total Pages | : 64 |
| Release | : 2017-07-10 |
| Genre | : Business & Economics |
| ISBN | : 1484308883 |
The growing incidences of financial crises and their damage to the economy has led policy makers to sharpen the focus on financial stability analysis (FSA), crisis prevention and management over the past 10–15 years. The statistical world has reacted with a number of initiatives, but does more need to be done? Taking a holistic view, based on a review of experiences of policy makers and analysts, this paper identifies common international threads in the data needed for FSA and suggests ways to address these. While there has been an encouragingly constructive response by statisticians, not least through the G-20 Data Gaps Initiative, more work is needed, including with regard to shadow banking, capital flows, corporate borrowing, and granular data. Further, to support FSA, the paper identifies potential enhancements to the conceptual advice in statistical manuals including with regard to foreign currency and remaining maturity.
| Author | : Asian Development Bank |
| Publisher | : Asian Development Bank |
| Total Pages | : 117 |
| Release | : 2015-09-01 |
| Genre | : Business & Economics |
| ISBN | : 9292570900 |
Financial soundness indicators (FSIs) are methodological tools that help quantify and qualify the soundness and vulnerabilities of financial systems according to five areas of interests: capital adequacy, asset quality, earnings, liquidity, and sensitivity to market risk. With support from the Investment Climate Facilitation Fund under the Regional Cooperation and Integration Financing Facility, this report describes the development of FSIs for Viet Nam and analyzes the stability and soundness of the Vietnamese banking system by using these indicators. The key challenges to comprehensively implementing reforms and convincingly addressing the root causes of the banking sector problems include (i) assessing banks' recapitalization needs, (ii) revising classification criteria to guide resolution options, (iii) recapitalization and restructuring that may include foreign partnerships, (iv) strengthening the Vietnam Asset Management Company, (v) developing additional options to deal with nonperforming loans, (vi) tightening supervision to ensure a sound lending practice, (vii) revamping the architecture and procedures for crisis management, and (viii) strengthening financial safety nets during the reform process.
| Author | : International Monetary Fund. Monetary and Capital Markets Department |
| Publisher | : International Monetary Fund |
| Total Pages | : 31 |
| Release | : 2010-08-27 |
| Genre | : Business & Economics |
| ISBN | : 1498336930 |
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.
