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International Monetary Fund

The Selected Issues paper analyzes the determinants of growth in Albania, the macroeconomic underpinnings for growth, the role of remittances in the economy, and the policy response to rapid credit growth. It also analyzes the official estimates with estimates from various macroeconomic surveys, and discusses the implications for the structure of the balance of payments. It also provides a framework for analyzing the budgetary impact of remittances in Albania, and examines the acceleration of credit growth and the policy options available to address the resulting macroeconomic and prudential concerns.

International Monetary Fund
The Australian legal and regulatory framework for securities markets exhibits a high level of compliance with the International Organization of Securities Commissions (IOSCO) Principles. A few remaining concerns need to be resolved, including some identified in the 2006 assessment. Australian Securities and Investments Commission’s (ASIC) operational independence and sufficiency of resources are overarching concerns which impair its ability to discharge its supervisory functions adequately and effectively across the entire regulated population.
International Monetary Fund
Liechtenstein has a GDP of US$5.2 billion, of which 40 percent comes from industry and 30 percent from financial services. Currently, 15 banks operate in Liechtenstein (one additional bank is in the process of being wound down without loss to the depositors). The market is highly concentrated with the three largest banks accounting for 90 percent of the total banking balance sheet size; 86 percent of assets under management; 89 percent of operating profits before tax, and 63 percent of employment in the banking sector.
International Monetary Fund. Monetary and Capital Markets Department
This Detailed Assessment of Observance on Insurance Core Principles on Thailand discusses that the government of Thailand has made a concerted effort to develop the insurance sector. The government has implemented a series of insurance development plans toward this end. Some significant regulatory and supervisory challenges remain, however, if Thailand is to continue to meet the pressures of a changing market and to continue to build the trust on which future growth depends. Consideration should be given to vesting more supervisory authority for key supervisory decisions with the Commission rather than with the Minister and Cabinet. Vesting authority with the Commission will help to ensure that the insurance supervisor has adequate powers to meet the objectives of insurance supervision. With respect to winding up and exit from the market, the insurance legislation should be amended to clearly establish a point at which it is no longer permissible for a troubled insurer to continue in business.
International Monetary Fund. Monetary and Capital Markets Department
This paper discusses the findings of the Detailed Assessment of Implementation on the International Organization of Securities Commissions (IOSCO) Objectives and Principles of Securities Regulation on Singapore. Overall compliance with IOSCO principles is generally high, although the assessors identified some vulnerabilities that need to be resolved. The Monetary Authority of Singapore’s (MAS) enforcement philosophy as regards securities markets and the financial intermediaries active therein is cogent, with outcomes focused and well developed. The Securities and Futures Act (Cap. 289) provides an effective framework to enable the sharing of information and cooperation between MAS and foreign regulators on supervisory and enforcement matters.
International Monetary Fund
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
International Monetary Fund
The design of the German banking supervision framework is structurally sound, with a robust legislative and operational framework that largely complies with the Basel Core Principles for effective banking supervision (BCP). Various improvements to the German supervisory framework have been implemented, acting on multiple recommendations and initiating improvements in supervisory practices on the basis of lessons from the global financial crisis. Further efforts are needed to make fully operational the improvements initiated in light of the lessons from the global financial crisis.
Michael Koetter, Mr. Tigran Poghosyan, and Thomas Kick
Based on detailed regulatory intervention data among German banks during 1994-2008, we test if supervisory measures affect the likelihood and the timing of bank recovery. Severe regulatory measures increase both the likelihood of recovery and its duration while weak measures are insignificant. With the benefit of hindsight, we exclude banks that eventually exit the market due to restructuring mergers. Our results remain intact, thus providing no evidence of "bad" bank selection for intervention purposes on the side of regulators. More transparent publication requirements of public incorporation that indicate more exposure to market discipline are barely or not at all significant. Increasing earnings and cleaning credit portfolios are consistently of importance to increase recovery likelihood, whereas earnings growth accelerates the timing of recovery. Macroeconomic conditions also matter for bank recovery. Hence, concerted micro- and macro-prudential policies are key to facilitate distressed bank recovery.
Mr. Thierry Tressel and Mr. Thierry Verdier
We consider a moral hazard economy in banks and production to study how incentives for risk taking are affected by the quality of supervision. We show that low interest rates may generate excessive risk taking. Because of a pecuniary externality, the market equilibrium may not be optimal and there is a need for prudential regulation. We show that the optimal capital ratio depends on the macro-financial cycle, and that, in presence of production externalities, it should be complemented by a constraint on asset allocation. We show that the political process tends to exacerbate excessive risk taking and credit cycles.