Abstract

In recent years, a broad and diverse range of countries—industrial, developing, and formerly centrally planned—have experienced significant banking difficulties. A recent survey undertaken by the Monetary and Exchange Affairs Department of the International Monetary Fund indicated that problems of this nature had arisen in nearly three-fourths of the total IMF membership (131 out of the Fund’s 182 member countries). These incidents have occurred even in economies such as those of the United States, Japan, and the Nordic countries, and, as a consequence, there has also been a growing recognition of the significance of banking system soundness for macroeconomic stability, an area in which central banks carry a major responsibility. Accordingly, increasing attention is being devoted to means of improving existing frameworks for preventing the recurrence of new banking sector difficulties as well as to the design of strategies for resolving individual and systemic bank problems when they do occur. In the IMF, the Monetary and Exchange Affairs and the Legal Departments have been heavily involved in these issues. Among other activities, the IMF has been called upon to coordinate the technical assistance of OECD countries’ central banks in this area.