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Business and Economics > Banks and Banking

You are looking at 1 - 10 of 219 items for :

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  • Türkiye, Republic of x
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Cover IMF Staff Country Reports
Republic of Türkiye: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Türkiye
International Monetary Fund. European Dept.
The 2024 Article IV Consultation highlights that a decisive shift in economic policies over the past year has tightened Türkiye’s overall policy stance. A significant tightening of macroeconomic policy since mid-2023 has substantially reduced crisis risks. Tighter financial conditions are weighing on domestic demand and inflation has fallen. Tax and expenditure measures partly dampened an expansionary fiscal impulse and the commitment to stronger incomes policies has strengthened credibility. The policy turnaround has reduced economic imbalances and revived confidence. Headline inflation has fallen as tighter financial conditions are weighing on domestic demand. Under the authorities’ gradual policy adjustment, inflation is expected to further decline. Risks around the baseline are significant and tilted to the downside. They include stronger-than-expected wage and price inertia, a reversal of capital flows, higher global energy prices, and escalating geopolitical tensions. Significant financial and external vulnerabilities remain. The authorities’ gradual approach to fighting inflation prolongs the period during which risks might occur.
Keywords:
inflation expectation; IFC portfolio implementation; WB program; WBG portfolio; authorities project growth; Inflation; Central bank policy rate; Fiscal stance; Minimum wages; Global
Cover IMF Working Papers
The Mirage of Falling R-stars
Ales Bulir
and
Jan Vlcek
Was the recent decline in real interest rates driven by a diminishing natural real interest rate, or have we observed a long sequence of shocks that have pushed market rates below the equilibrium level? In this paper we show on a sample of 12 open economies that once we account for equilibrium real exchange rate appreciation/depreciation, the natural real interest rate in the 2000s and 2010s is no longer found to be declining to near or below zero. The explicit inclusion of equilibrium real exchange rate appreciation in the identification of the natural rate is the main deviation from the Laubach-Williams approach. On top of that, we use a full-blown semi-structural model with a monetary policy rule and expectations. Bayesian estimation is used to obtain parameter values for individual countries.
Keywords:
r-star; zero lower bound; equilibrium real appreciation; Penn effect; HLW framework; open-economy extension; ales Bulfr; Time-Invariant Estimates; HLW estimate; Real interest rates; Real exchange rates; Central bank policy rate; Exchange rates; Exchange rate adjustments; Global
Cover Technical Notes and Manuals
Resolving Opaque Bank Ownership and Related-Party Exposures
Edda R Karlsdóttir
,
Rachid Awad
,
Ender Emre
,
Alessandro Gullo
,
Aldona Jociene
, and
Constant Verkoren
This note intends to provide advice to bank supervision and resolution authorities and policymakers seeking to deal with opaque bank ownership or significant overhang of related-party exposures.
Keywords:
bank Ownership structures; bank Ownership transparency; IMF Library; bank owner; related-party transaction; Basel Core Principles; Anti-money laundering and combating the financing of terrorism (AML/CFT); Bank resolution; State-owned banks; Global
Cover Shocks and Capital Flows
Shocks and Capital Flows
Policy Responses in a Volatile World

Abstract

The high exposure of open economies to shocks makes them particularly vulnerable to volatile capital flows and advanced economy monetary policy spillovers. How should and do domestic policymakers respond? The traditional answer has been to use flexible exchange rates as a shock absorber. But flexible exchange rates may not offer full insulation when financial markets are imperfect. This book brings together recent empirical studies at the International Monetary Fund (IMF) on the effectiveness of different tools in responding to such shocks. The 18 chapters in this volume provide a rich background to the recently launched Integrated Policy Framework by the IMF. They comprise assessments of countries’ actual use of different tools, as well as in-depth evaluations of their effectiveness and side effects, covering macroprudential policies, monetary policy, foreign-exchange intervention, and capital flow management policies. Many of the studies involve new data and methods to tackle the inherently difficult problems in identifying and comparing the effects of policies under different circumstances. As a result, the volume offers the reader a comprehensive, in-depth coverage of the policy-oriented empirical research that has informed the development of a new way of thinking about open-economy macroeconomics at the IMF.

Keywords:
Capital flows; monetary policy; exchange rate policy; foreign exchange intervention; macroprudential policy; capital controls; FX debt; account restrictiveness; exchange rate intervention; IT regime; Exchange rates; Macroprudential policy instruments; Global; Asia and Pacific; Caribbean; Central America; Europe
Cover Regional Economic Outlook: Europe, April 2023
Regional Economic Outlook: Europe, April 2023
Europe’s Balancing Act: Taming Inflation without a Recession
International Monetary Fund. European Dept.

Abstract

Economic growth has tumbled across Europe, inflation remains too high, and financial sector risks have materialized. Taming sticky inflation while avoiding financial stress and a recession will require tighter macroeconomic policies—tailored to changing financial conditions, stronger financial regulation and supervision, and bolder supply-side reforms that heal scars from the COVID-19 and energy crises.

Keywords:
Europe; regional outlook; economic growth; recession; financial stability; inflation; Russia’s war in Ukraine; COVID-19; financial sector risks; financial stress; financial regulation; energy; Türkiye earthquakes; housing market risks; Taylor Rule; European banking sector; labor; fiscal policy; monetary policy; financial policy; recovery; European economy; inflation expectation; rate surprise; growth-inflation trade-off; headline inflation; ECB monetary policy; price cap; central bank inflation target; target rule; inflation risk; Energy prices; Central bank policy rate; Inflation targeting; Housing prices; Global
Cover IMF Working Papers
Gold as International Reserves: A Barbarous Relic No More?
Mr. Serkan Arslanalp
,
Mr. Barry J. Eichengreen
, and
Chima Simpson-Bell
After moving slowly downward for the better part of four decades, central bank gold holdings have risen since the Global Financial Crisis. We identify 14 “active diversifiers,” defined as countries that purchased gold and raised its share in total reserves by at least 5 percentage points over the last two decades. In contrast to the diversification of foreign currency reserves, which has been undertaken by advanced and developing country central banks alike, active diversifiers into gold are exclusively emerging markets. We document two sets of factors contributing to this trend. First, gold appeals to central bank reserve managers as a safe haven in periods of economic, financial and geopolitical volatility, when the return on alternative financial assets is low. Second, the imposition of financial sanctions by the United States, United Kingdom, European Union and Japan, the main reserve-issuing economies, is associated with an increase in the share of central bank reserves held in the form of gold. There is some evidence that multilateral sanctions imposed by these, and other countries have a larger impact than unilateral sanctions on the share of reserves held in gold, since the latter leave scope for shifting reserves into the currencies of other non-sanctioning countries.
Keywords:
International Reserves; Gold; Sanctions; aggregate gold share regression; gold appeal; share of gold; gold share; country level gold share regression; Gold reserves; Reserve assets; Gold prices; Global
Cover IMF Staff Country Reports
Republic of Türkiye: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
Türkiye’s bank-dominated financial sector has grown markedly and shown areas of resilience since the last Financial Sector Assessment Program (FSAP). However, macrofinancial volatility has risen significantly, foreign investors have receded from local markets, and demand for dollarized and state-guaranteed foreign-exchange (FX) protected Lira deposits has risen alongside a deeply negative real policy interest rate set against the backdrop of rapidly tightening global financial conditions. An array of idiosyncratic measures has been deployed that attempt to offset the highly negative policy rate and achieve multiple objectives.
Keywords:
FX liquidity risk; meeting FX liquidity; stress test result; FX intervention; volatilitybased FX rule; outflow scenario; FX asset; Financial sector stability; Financial Sector Assessment Program; Commercial banks; Financial sector; Global
Cover IMF Working Papers
Systemwide Liquidity Stress Testing Tool
Ms. Hiroko Oura
Developing a systemic liquidity stress testing tool is challenging due to data constraints and hard-to-model behavioral factors. There has yet to be a uniformly accepted model partly because the nature of systemic liquidity risks differs significantly across countries. This paper offers a simple Excel-based tool to assess the high-level impact of aggregate liquidity stress on the whole economy and gauge its spillover across banks, non-bank financial institutions (NBFIs), and non-financial economic sectors. It primarily uses the balance sheet approach (BSA) data—a sector-aggregate matrix of financial exposure by counterpart—that have become increasingly available for various economies with all income levels. The results can identify systemically important financial linkages to be analyzed further and help calibrate macroprudential measures and a liquidity support framework. When liquidity stress stems from capital outflows, the tool can enrich policy discussion based on integrated policy framework (IPF) and international reserve adequacy perspectives.
Keywords:
Systemic liquidity; NBFIs; stress test; integrated policy framework; capital flow; international reserve adequacy; interconnectedness; balance sheet approach; macroprudential policy; financial stability; central bank FX liquidity buffer; cashflow liquidity stress test; liquidity support framework; systemwide liquidity risk; central bank liquidity provision; Liquidity; Liquidity stress testing; International reserves; Stress testing; Global
Cover Departmental Papers
Asset Purchase Programs in European Emerging Markets
Mr. Marco Arena
,
Mr. Rudolfs Bems
,
Mr. Nadeem Ilahi
,
Mr. Jaewoo Lee
,
William Lindquist
, and
Mr. Tonny Lybek
Several emerging market central banks in Europe deployed asset purchase programs (APPs) amid the 2020 pandemic. The common main goals were to address market dysfunction and impaired monetary transmission, distinct from the quantitative easing conducted by major advanced economy central banks. Likely reflecting the global nature of the crisis, these APPs defied the traditional emerging market concern of destabilizing the exchange rate or inflation expectations and instead alleviated markets successfully. We uncover some evidence that APPs in European emerging markets stabilized government bond markets and boosted equity prices, with no indication of exchange rate pressure. Examining global and domestic factors that could limit the usability of APPs, in the event of renewed market dysfunction we see a potential scope for scaling up APPs in most European emerging markets that used APPs during the pandemic, provided that they remain consistent with the primary objective of monetary policy and keep a safe distance from the risk of fiscal dominance. As central banks in the region move towards monetary policy tightening, the tapering, ending, and unwinding of APPs must also be carefully considered. Clear and transparent communication is critical at each step of the process, from the inception to the closure of APPs, particularly when a large shock hits and triggers a major policy shift.
Keywords:
Monetary policy; Emerging markets; COVID-19 pandemic; Europe; asset purchase programs; emerging market concern; IMF library; market dysfunction; emerging market central banks; Yield curve; Government securities; Sovereign bonds; Emerging and frontier financial markets; Central bank policy rate; Global
Cover IMF Staff Country Reports
Turkey: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Turkey
International Monetary Fund. European Dept.
In Turkey, as in other countries, the human and economic toll of the COVID-19 pandemic has been severe. Thousands of lives have been tragically lost and many livelihoods compromised. The initial policy response to the pandemic—and subsequent sharp growth rebound—set Turkey apart from its peers. Rapid monetary and credit expansion and large liquidity support meant that Turkey was among the few countries to experience positive economic growth in 2020. But these policies also aggravated pre-existing economic and financial vulnerabilities. Higher inflation, increased dollarization, and a large shift in the current account position increased pressure on the lira and gave rise to heavy foreign exchange sales, which led in turn to steep reserve declines from already-low levels. A policy shift in late 2020—mainly towards tighter and more transparent monetary policy and slower credit growth—was both welcome and necessary. But the durability and depth of the shift were called into question in March 2021, following the change in central bank leadership, as the lira weakened markedly and interest rate spreads widened.
Keywords:
credit policy; fiscal policy coordination; IFC portfolio implementation; FX rediscount credit repayment; IMF staff calculation; policy uncertainty; COVID-19; State-owned banks; Inflation; Global; Europe