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Business and Economics > Banks and Banking

You are looking at 1 - 10 of 2,591 items for :

  • Type: Journal Issue x
  • Monetary Policy, Central Banking, and the Supply of Money and Credit: General x
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Cover IMF Staff Country Reports
Samoa: 2024 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. Asia and Pacific Dept
The Samoan economy has bounced back strongly over the last two years, supported by a recovery in tourism. Fiscal surpluses, in part due to high grant flows, have helped the country emerge from the pandemic with enhanced buffers. At the same time, several longstanding and emerging factors—including lack of economies of scale, climate vulnerabilities, ML/TF concerns, delays in the implementation of public investment due to capacity constraints, and rising outward migration—pose challenges to the economic outlook in the medium term.
Keywords:
APG plenary; basket of currencies; TF risk; follow-up process; burden indicator; inflation risk; help of IMF TA; Anti-money laundering and combating the financing of terrorism (AML/CFT); Credit; Global; Pacific Islands; Australia and New Zealand
Cover IMF Working Papers
TLTRO Spillovers Outside the Euro Area
Carolina Lopez-Quiles
and
Adil Mohommad
We examine spillovers from ECB’s TLTROs on European countries outside the euro area. Using individual banks’ balance sheet data, we find that TLTROs lowered funding and lending rates for foreign-owned subsidiaries, especially in emerging market economies. We also find an increase in profitability among foreign subsidiaries and no effects on solvency risk. The effects are sizable--every €1 billion in exposure to TLTROs via parent banks is associated with 0.2 bps reduction in deposit rates and 0.4 bps reduction in lending rates of foreign subsidiaries. This underscores the need to factor euro area monetary policies into policy settings outside the euro area.
Keywords:
Monetary policy; spillovers; TLTRO; CESEE; TLTRO operation; TLTRO exposure; spillovers from ECB's TLTROs; subsidiaries' share; ECB's Targeted Longer-Term Refinancing Operations; Deposit rates; Bank credit; Foreign banks; Business cycles; Europe
Cover IMF Staff Country Reports
Haiti: Staff-Monitored Program-Press Release and Staff Report
International Monetary Fund. Western Hemisphere Dept.
Recent developments. Haiti is facing exceptionally challenging circumstances. The deteriorating security environment, which reached crisis proportions in the first few months of 2024, has continued to worsen, disrupting supply chains (particularly energy and basic services) and feeding inflationary pressures. In November 2024, Haiti's transitional Presidential Council designated Prime Minister Alix Didier Fils-Aimé to form a new government with a time-bound mandate through next elections. The government has a narrow but important window of opportunity to implement reforms that could help restore the country’s potential over the medium term.
Keywords:
governance Diagnostic Report; SMP lapse; government priority; transparency policy; management of the International Monetary Fund; PROGRAM monitoring; SMP commitment; Credit; International reserves; Global
Cover IMF Staff Country Reports
Suriname: 2024 Article IV Consultation and the Eighth Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Modification of Performance Criteria, Waivers of Nonobservance of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Suriname
International Monetary Fund. Western Hemisphere Dept.
The authorities’ commitment to a range of policy reforms continues to strengthen macroeconomic stability. The economy is growing, inflation is receding, donor support is increasing, the public debt is declining, and international bond spreads are at historic lows. The Final Investment Decision (FID) to develop a large offshore oil field was announced on October 1. Moody’s has upgraded Suriname’s sovereign debt rating and changed the outlook to positive.
Keywords:
Surinamese authorities; tax authorities; debt sustainability outlook; recapitalization plan; B. data standard; governance reform agenda; policy priority; management framework; government procurement; Monetary base; International reserves; Exchange rates; Arrears; Caribbean
Cover Policy Papers
Considerations for the Comprehensive Review of Access Limits
International Monetary Fund. Strategy, Policy, & Review Department
,
International Monetary Fund. Finance Dept.
, and
International Monetary Fund. Legal Dept.
This paper provides background for an informal discussion to engage with Executive Directors, held on November 26, 2024, on the Comprehensive Review of GRA Access Limits. The General Resources Account (GRA) access limits are part of the Fund’s risk management framework. They help maintain a balance between the need to: (i) ensure that members have confidence in the availability of Fund financing; and (ii) preserve liquidity and the revolving nature of the Fund’s resources.
Keywords:
risk management framework; GRA lending commitment; transparency policy; managing transition; enterprise risk consideration; risk tolerance; financing needs; Credit; Liquidity; Credit risk; COVID-19; Global
Cover IMF Staff Country Reports
Costa Rica: Post Financing Assessment-Press Release; and Staff Report
International Monetary Fund. Western Hemisphere Dept.
This paper discusses Costa Rica’s Post Financing Assessment. Growth has exceeded 4 percent so far in 2024 and is expected to moderate to 3 1/2 percent in 2025. Costa Rica successfully completed its Extended Fund Facility and Resilience and Sustainability arrangements in June. Growth remains robust, inflation continues to converge to the central bank’s target from below, and international reserves are ample. Discussions centered on further enhancing economic and climate resilience, capitalizing on Costa Rica’s economic fundamentals and institutions, and sustaining the policy track record that has been demonstrated over the past several years. Fiscal consolidation should be anchored on reducing spending in nonpriority areas and bolstering revenues while allowing for some increase in social spending. The fiscal stance should be centered on adhering to the fiscal rule and medium-term fiscal framework. The recent intervention and resolution of two small, nonbank financial institutions underscores the importance of the authorities’ plans to strengthen the frameworks for bank resolution and deposit insurance. Progress in a range of supply side areas will be important to raise potential growth and mitigate the effects of climate change.
Keywords:
BCCR President Madrigal López; Policy discussion; debt management reform; IMF's transparency policy; financing cost; Credit; International reserves; Global; Central America
Cover IMF Working Papers
Industrial Policy and State Ownership: How Do Commercial Banks Allocate Credit in China?
Ying Xu
Using a novel data set with bank-sector-level annual loan data from 137 commercial banks in China from 2004 to 2021 and a quantified industrial policy data set based on text analysis, this paper explores the effects of industrial policy on bank credit provision. While the paper finds no conclusive evidence that commercial banks allocate, on average, more credit to sectors promoted by the central government, it does find heterogenous sensitivities of banks to industrial policy. Rural commercial banks tend to respond most positively to industrial policy compared to other commercial banks. Banks that have lower asset quality, are smaller, have a higher liquidity ratio, and are not listed are more responsive to industrial policy. In addition, sectors dominated by state-owned enterprises (SOEs) benefit more when there is an industrial policy announcement, while policies in SOE-dominated sectors will crowd out credit to other sectors, because SOEs are less risky, both economically and politically. Therefore, banks face a trade-off between political pressure and profitability in response to industrial policy, leading to distortions of financial resource allocation in favor of SOEs.
Keywords:
Industrial Policy; State Ownership; Bank Credit; Rural commercial banks; bank characteristic; bank credit provision; City commercial banks; bank-level sample; Commercial banks; Credit; Loans; East Asia
Cover Policy Papers
Central Bank Stress Testing—Guidance Note
International Monetary Fund. Monetary and Capital Markets Department
The expansion of central bank balance sheets has become a critical topic in the wake of the Global Financial Crisis and the COVID-19 pandemic. Central banks have taken unprecedented measures to ensure price stability and financial stability, particularly when traditional policy tools were insufficient. However, this expansion has led to significant balance sheet risks, resulting in notable losses as central banks have adjusted their policies in response to rising inflation. This guidance note explores these risks and introduces a modeling framework to assess them. While essential for achieving stability, the expansion of central bank balance sheets introduces significant risks that require careful management. The proposed modeling framework is a valuable tool for assessing these risks and guiding capital policy. Exploring the relationship between balance sheet size and economic outcomes could yield beneficial insights for future central bank strategies.
Keywords:
Central bank; balance sheet; stress testing; balance sheet risk; central bank equity; forecasting balance sheet; central bank bank transfer; balance sheet action; central bank profit; Financial statements; Central bank policy rate; Central bank balance sheet; Yield curve; International reserves; Global
Cover IMF Working Papers
Monetary Policy and Inflation Scares
Christopher J. Erceg
,
Jesper Lindé
, and
Mathias Trabandt
A salient feature of the post-COVID inflation surge is that economic activity has remained resilient despite unfavorable supply-side developments. We develop a macroeconomic model with nonlinear price and wage Phillips curves, endogenous intrinsic indexation and an unobserved components representation of a cost-push shock that is consistent with these observations. In our model, a persistent large adverse supply shock can lead to a persistent inflation surge while output expands if the central bank follows an inflation forecast-based policy rule and thus abstains from hiking policy rates for some time as it (erroneously) expects inflationary pressures to dissipate quickly. A standard linearized formulation of our model cannot account for these observations under identical assumptions. Our nonlinear framework implies that the standard prescription of "looking through" supply shocks is a good policy for small shocks when inflation is near the central bank's target, but that such a policy may be quite risky when economic activity is strong and large shocks drive inflation well above target. Moreover, our model implies that the economic costs of "going the last mile" – i.e. a tight stance aimed at returning inflation quickly to target – can be substantial.
Keywords:
Inflation Dynamics; New Keynesian Model; Inflation Risk; Monetary Policy; Linearized Model; Nonlinear Model; State-Dependent Pricing; cost-push shock; policy rule; COVID inflation surge; Inflation; Inflation targeting; Supply shocks; Central bank policy rate; Labor markets
Cover IMF Staff Country Reports
Honduras: First and Second Reviews Under the Extended Fund Facility and the Extended Credit Facility Arrangements, and Requests for Waivers of Nonobservance of Performance Criteria and Rephasing of Purchases-Press Release; Staff Report; and Statement by the Executive Director for Honduras
International Monetary Fund. Western Hemisphere Dept.
This page discusses Honduras’ First and Second Reviews under the Extended Fund Facility and the Extended Credit Facility Arrangements, and Requests for Waivers of Nonobservance of Performance Criteria and Rephasing of Purchases. The Honduran economy remains resilient, despite external and climate shocks. The authorities have adopted measures to reduce electricity losses and domestic arrears of the state-owned electricity company. Strengthened budget execution, energy sector reforms, proactive implementation of monetary and exchange rate policies, and intensified efforts to tackle long-standing structural bottlenecks remain key to safeguard macroeconomic stability and to promote inclusive and sustained growth. The increasing frequency of climate change-related events calls for accelerating the implementation of climate adaptation policies. In order to support these efforts, the authorities have requested an arrangement under the Resilience and Sustainability Facility. Close engagement with IMF staff on this area will continue.
Keywords:
November inflation data; Honduran authorities; Honduras team; November inflation print; bond issuance; Debt sustainability analysis; Credit; Global