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Business and Economics > Banks and Banking

You are looking at 1 - 10 of 7,078 items for :

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Cover Technical Assistance Reports
Bhutan: Technical Assistance Report-Development of an Interest Rate Corridor Framework
International Monetary Fund. Asia and Pacific Dept
and
International Monetary Fund. Monetary and Capital Markets Department
In August 2024, at the request of the Royal Monetary Authority of Bhutan (RMA), the IMF South Asia Regional Training and Technical Assistance Center (SARTTAC) conducted a Technical Assistance (TA) mission in Thimphu. The mission aimed to assist the RMA in establishing an interest rate corridor (IRC) and operationalizing related instruments, liquidity forecasting, and collateral frameworks. The mission identified that the RMA lacks necessary monetary policy instruments to effectively address changing systemic liquidity conditions and financial stability challenges. It emphasized the need to move away from reliance on administrative controls, as the absence of appropriate price incentives reinforces the preference for foreign exchange among Bhutanese residents, increasing pressures on the peg. To tackle these issues, the mission proposed a phased approach to introduce the IRC. Initially, relevant external and internal documents should be finalized, followed by mock operations. The first phase involves introducing a one-week main Open Market Operation (OMO), conducted weekly at the policy rate with full allotment. Automatic access to the IRC's standing facilities should be ensured. Later, fixed-quantity, variable-rate OMOs should be utilized, relying on liquidity forecasting to calibrate operations. Additionally, the mission recommended reinstating sweeping arrangements for government accounts and enhancing coordination with the Treasury to improve liquidity forecasting. These measures aim to strengthen the RMA's operational framework and enhance the effectiveness of monetary policy.
Keywords:
Monetary policy; International organization; Bhutan.; RMA money market contact group; IMF South Asia Regional Training and Technical Assistance Center; IMF's Monetary; expert of the IMF Monetary; interest rate corridor framework; Liquidity management; Interest rate corridor; Liquidity; Commercial banks; Central bank policy rate
Cover IMF Staff Country Reports
Indonesia: Financial Sector Assessment Program-Technical Note on Stress Testing and Systemic Risk Analysis
International Monetary Fund. Monetary and Capital Markets Department
The FSAP team undertook a thorough top-down corporate and bank solvency, bank liquidity stress tests as well as analysis of interconnectedness using mid-2023 data. This note covers the methodology and results of the scenario-based solvency test, the single factor sensitivity analysis, the liquidity test, and interconnectedness analysis. The stress test exercise was carried out on a sample of 105 commercial banks. The analysis is heavily dependent on supervisory data on individual banks’ positions shared by the OJK and BI as well as publicly available information on corporate sector. While FSAP results are not directly comparable to the authorities’ own stress testing results due to differences in scenarios, methodologies, and objectives, they provide an assessment of the system-wide resilience of the Indonesian banking sector at the current juncture.
Keywords:
banking sector characteristic; coverage ratio; interconnectedness ANALYSIS; capital markets department; bank credit risk; liquidity sensitivity analysis; FX LIQUIDITY ANALYSIS; Stress testing; Commercial banks; Liquidity; Loans; Securities; Global
Cover Selected Issues Papers
Real Estate Sector and Financial Stability Risks in Chile: Chile
Tatsushi Okuda
The Chilean real estate sector has recently undergone adjustments which have increased the risks for the financial sector, but the system remains overall resilient. In the baseline, the real estate market is expected to modestly recover, and several factors mitigate credit risk. The buffers in the financial sector currently appear broadly adequate to absorb stresses from high long-term interest rates and the tail risk of a real estate crisis. Nevertheless, supervisors should monitor these risks closely, keep advancing in closing data gaps, and continue to extend stress test models to comprehensively capture real estate-specific risk factors.
Keywords:
Financial sector stability; Real estate sector; Stress testing; I. housing wealth effect; risk factors; real estate crisis; real estate; Mortgages; Loans; Long term interest rates; Global
Cover IMF Working Papers
Sandcastles and Financial Systems: A Sandpile Metaphor
Francesco Luna
and
Luisa Zanforlin
Social welfare costs from bank resolution, including contagion and moral hazard, are often thought to be minimized when supervisors can direct the merger of a failing bank with a sound, healthy one. However, social losses may become even larger if the absorbing institutions fail themselves. We ask whether social welfare losses are indeed lower when supervisors intervene rather than not. We use the sand pile/Abelian model as a metaphor to model financial losses which, as sand grains that fall onto a pile, eventually lead to a slide/failure. When capital in the system is insufficient to absorb the failing institution there will be welfare losses. Results suggest that, over the longer-term, social costs are lower when supervisors manage mergers. Additionally, financial networks that have a structure that minimizes social losses also minimize crises frequency. However, the bank employed resolution strategy will determine which financial network structures are associated with the minimum average loss per bankruptcy event.
Keywords:
Applied Abelian model; Banking; Financial Networks; Financial Economics; Banking Crisis; Bankrupcy; Bank Resolution; Selforganized Criticality; Bank Regulation and Supervision; welfare loss; resolution strategy; loss distribution; bank resolution regime supervisor; banks fail; shareholder bank; Distressed institutions; Commercial banks; Crisis resolution; Global
Cover Technical Assistance Reports
Belize: Technical Assistance Report-Developing the Supervision of E-Money Issuers
International Monetary Fund. Monetary and Capital Markets Department
IMF conducted a mission at the request of the Central Bank of Belize provided technical assistance focusing on developing a framework for the supervision of electronic money issuers in Belize. The mission reviewed existing approaches to supervising firms conducting regulated financial activities, as well as the regulatory framework and licensing practices for e-money issuers only to the extent that they influence and impact effective supervision. The mission also met with other key stakeholders from the public and private sector setting out nine key recommendations covering risk-based supervision, data collection, reconciliations, transparency, fund safeguarding, permitted investments, agents, inspection reports, and domestic collaboration.
Keywords:
Electronic money; E-money; Supervision; Belize; Central Bank; fintech; Payments.; IMF's Monetary; instrumentalities of the CD recipient; World Bank staff; e-money issuer; terms and conditions; risk assessment; Central bank bills; National payment systems; Credit bureaus; Payment systems
Cover Technical Notes and Manuals
Sibling Rivalry in the Financial Safety Net: Governance Arrangements for Bank Resolution and Deposit Insurance
Atilla Arda
and
Jan Nolte
The technical note and manual "Sibling Rivalry in the Financial Safety Net," authored by Atilla Arda and Jan Nolte, examines the governance structures essential critical for effective bank resolution and deposit insurance functions. Considering the vulnerabilities exposed during the 2008-09 global financial crisis, the note emphasizes the interconnectedness of these two critical functions, both of which aim to safeguard depositors and maintain financial stability. The authors discuss various institutional arrangements, highlighting the choice between integrating both functions within existing agencies or establishing new entities. The note then identifies potential conflicts of interest among resolution authorities, deposit insurance systems, other safety net participants such as central banks and supervisory agencies, and the financial sector. These potential conflicts underscore the necessity of robust governance frameworks to address these challenges and ensure autonomy, operational independence, and accountability of the two functions. The note emphasizes the need for strong legal protections for individuals in charge of resolution and deposit insurance, ensuring they can take decisive actions during crises. By exploring best practices and case studies, including Denmark's integrated framework, the authors provide valuable insights into optimizing institutional and governance arrangements by integrating the deposit insurance function within the resolution authority. This could support effective cooperation among authorities which is vital for creating resilient financial safety nets.
Keywords:
deposit insurance; bank resolution; crisis preparedness; crisis management; financial crisis; financial stability; governance; independence; autonomy; deposit insurance agency; deposit insurance system; views ofthe IMF; governance arrangement; deposit insurance fund; deposit insurer; Bank resolution framework; Financial safety nets; Financial sector stability; Global
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
Albania: Selected Issues
International Monetary Fund. European Dept.
2024 Selected Issues
Keywords:
risk result; market liquidity; Albanian banking sector; banks' liquidity resilience; LCR value; Currency markets; Exchange rates; Commercial banks; Liquidity requirements; Capital adequacy requirements; Global
Cover IMF Working Papers
Long-Term Debt and Short-Term Rates: Fixed-Rate Mortgages and Monetary Transmission
Alessia De Stefani
and
Rui Mano
We study the two-way relationship between fixed-rate mortgages (FRMs) and monetary policy in a panel of up to 35 countries over the last two decades. The dataset includes quarterly information on the composition of mortgage flows and stock by type of rate-fixation and monetary policy shocks cleaned of information effects. Using instrumental-variablel local projections, we find both path- and state-dependency in monetary transmission. Monetary policy shapes mortgage choice, increasing (decreasing) the share of FRMs during easing (tightening) cycles. Over time, this mechanism alters the composition of the outstanding mortgage stock which, in turn, affects the central bank's ability to stabilize the economy ex-post. A greater (lower) prevalence of FRMs weakens (strengthens) monetary policy transmission to key macro-variables.
Keywords:
Monetary Policy; Mortgage Markets; monetary policy shock; monetary policy transmission; mortgage choice; prevalence of FRMs; ARM rate; Mortgages; Central bank policy rate; Stocks; Housing prices; Private consumption; Global