- Carl-Johan Lindgren, and D. Folkerts-Landau
- Published Date:
- January 1998
© 1998 International Monetary Fund
Cover and Design by IMF Graphics Section
Library of Congress Cataloging-in-Publication Data
Toward a framework for financial stability/prepared by a staff team of the International Monetary Fund led by David Folkerts-Landau and Carl-Johan Lindgren.
p. cm.—Includes bibliographical references
1. Monetary policy. 2. Economic stabilization. 3. Banks and banking. I. Folkerts-Landau, D. F. I. (David Fokke Ihno), 1949-II. Lindgren, Carl-Johan. III. International Monetary Fund.
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As used in this volume the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.
Financial globalization and liberalization have heightened awareness of the crucial interrelationships between macroeconomic policy and financial sector developments. The Fund has thus placed greater emphasis on financial systems in its consultations, policy advice, and technical assistance. This paper was designed as a first step in designing a framework that could be used to further its work in the surveillance of its members’ financial sectors. As such, it draws heavily on existing work, particularly that of the Basle Committee on Banking Supervision, which has greatly contributed to the promotion of internationally accepted standards and practices for bank supervision. To aid further dissemination, the recently published “Core Principles for Effective Banking Supervision” are annexed to this paper. In addition, the Fund is greatly indebted to the comments of a large number of experts, both members of the Basle Committee and supervisory officials from emerging market countries, as well as to a number of other commentators. The framework also benefits from the research of the Fund and the World Bank, as well as experience gathered by both institutions in providing technical assistance and policy advice to their member countries. The Fund also acknowledges the support of the International Organization of Securities Commissions for permission to annex some of its work.
The paper was prepared under the general direction of Manuel Guitian, Director of the Monetary and Exchange Affairs Department, and Michael Mussa, Economic Counselor and Director of the Research Department. It was written by a staff team headed by David Folkerts-Landau and Carl-Johan Lindgren and consisting of Donald Mathieson, Richard Abrams, Bankhim Chadha, Daniel Duenas, Gillian Garcia, Jan Willem van der Vossen, Laura Kodres, Michael Spencer, Peter Hayward, and other staff of the Monetary and Exchange Affairs and Research Departments. Sheila Kinsella, Lisa Scott-Hill, Lidia Tokuda, and Adriana Vohden provided expert secretarial assistance. Marina Primorac edited the manuscript and coordinated the production of this publication.
The paper has benefited from comments and suggestions from staff in other IMF departments, as well as from Executive Directors following their discussion of an earlier draft of this paper on March 28, 1997. The analysis, however, is that of the contributing staff and should not be attributed to Executive Directors or their national authorities.