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Business and Economics > Finance: General

You are looking at 1 - 10 of 199 items for :

  • Type: Journal Issue x
  • Insurance; Insurance Companies; Actuarial Studies x
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Cover Selected Issues Papers
Vulnerabilities and Risks in Denmark’s Nonbank Financial Institutions: Denmark
Burcu Hacibedel
and
Mariusz Jarmuzek
Denmark’s nonbank financial institutions (NBFI) sector has substantially increased in size since the Global Financial Crisis (GFC), becoming an important part of the financial system. Systemic risk associated with NBFIs have been contained but warrants close monitoring, especially regarding leverage, liquidity buffers, and interconnectedness. There are important mitigating factors that reduce systemic risk stemming from NBFIs in Denmark. Strengthening of systemic risk assessment and policy framework for NBFIs is warranted and could include developing a systemic risk assessment framework covering both banks and NBFIs and an ensuing system-wide stress testing framework.
Keywords:
Denmark; balance sheet analysis; non-bank financial institutions; systemic risk assessment; NBFI sector; Denmark's nonbank financial institutions; D. mitigating factor; covered bond bond market; asset liability management risk; Nonbank financial institutions; Covered bonds; Mutual funds; Systemic risk; Global
Cover Technical Assistance Reports
Papua New Guinea: Technical Assistance Report-Financial Sector Stability Review
International Monetary Fund. Monetary and Capital Markets Department
The main objective of the FSSR diagnostic mission was to help the PNG authorities build a roadmap of technical assistance (TA) to address identified financial sector needs and gaps, with a view to strengthen resilience of financial institutions and to enhance the policy framework. The PNG FSSR diagnostic covered six areas: (i) macroprudential policy; (ii) regulation and supervision of banks and other deposit-taking financial institutions; (iii) regulation and supervision of insurance companies and pension funds; (iv) financial safety net and crisis preparedness framework; (v) financial market infrastructure; and (vi) financial sector statistics.
Keywords:
Financial sector stability; IMF MCM; Macro-financial risk; PNG FSSR TA roadmap.; IMF's Monetary; FSSF phase; FSSR recommendation; payment system oversight function department; IMF executive directors; BPNG's management; investment strategy; bridge bank authority; Macroprudential policy; Insurance; Payment systems; Global
Cover IMF Working Papers
Implementing Risk-Based Solvency for Insurers—Lessons from Kenya, Mexico, and South Africa
Peter Windsor
,
Suzette J Vogelsang
,
Christiaan Henning
,
Kerwin Martin
,
Elias Omondi
,
Gerardo Rubio
, and
Jooste Steynberg
International standards and best practice supports the implementation of a risk-based solvency regime in the regulation and supervision of insurers. Several emerging market and developing economies are transitioning to such a solvency regime or planning to do so. This paper discusses Kenya, Mexico, and South Africa’s journey to putting in place a risk-based solvency regime which had several common elements notwithstanding significantly different insurance sectors. The transition was a multi-year project requiring dedicated additional resources; restructuring of the regulator, including redesigning supervisory processes and tools and upgrading information technology systems; and significantly greater coordination between the regulator and the insurance industry.
Keywords:
Insurance; Risk-based Solvency; Risk-based supervision; solvency regime; Penetration rate; RBS project; solvency assessment; RBS implementation; supervision of insurer; Insurance companies; Solvency; Financial statements; Africa; Global
Cover High-Level Summary Technical Assistance Reports
India: Review and Evaluation of the Reserve Bank of India’s Stress Test Model Framework
Marco Gross
and
Wei Sun
This report provides a brief summary of the purpose and findings of a technical assistance (TA) mission that was intended to review and evaluate the Reserve Bank of India (RBI)’s stress test model suite, which took place in April 2023. The RBI’s model suite was found to be strong and well developed in numerous respects. The most noteworthy recommendations pertain to credit risk, market risk, and macro-financial scenario design. A detailed list of 28 recommendations spanning all areas was left with the RBI. A detailed TA report accompanies this brief summary report.
Keywords:
Bank solvency risk analysis; liquidity risk analysis; contagion analysis; stress test model framework; IMF team; RBI's model suite; TA mission; summary report; Stress testing; Market risk
Cover Selected Issues Papers
Financial Stability Risks from Commercial Real Estate: Germany
Mustafa Saiyid
Following post-pandemic tightening of monetary policy in advanced economies, commercial real estate (CRE) markets have been under pressure globally, including in Germany. This paper explores the channels of CRE impact for the German financial sector, and the potential size of impact for individual German banks based on publicly available data. It finds that German banks, in aggregate, are adequately capitalized and sufficiently liquid to absorb potential losses. However, elevated CRE-related credit risks suggest the need for close monitoring of some individual institutions, conservative capital distributions, adequate loan-loss provisions, retention of macroprudential buffers, and testing of financial safety arrangements.
Keywords:
German banks' capital and liquidity; stress tests; commercial real estate exposures; German insurers' solvency; Germany financial sector policies; German household and corporate sector vulnerabilities; German financial contagion; D. solvency stress analysis; CRE exposure; stress impact; commercial real estate; B. real estate development; CRE loan; Loans; Nonperforming loans; Financial sector risk; Collateral; Covered bonds; Global
Cover IMF Staff Country Reports
Luxembourg: Financial Sector Assessment Program—Technical Note on Insurance Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
This technical note analyzes the key aspects of the regulatory and supervisory regime for insurance companies in Luxembourg. The analysis is part of the 2024 Financial Sector Assessment Program (FSAP) and based on the regulatory framework in place and the supervisory practices employed as of October 2023. The FSAP reviewed recent developments and the structure of the Luxembourgish insurance sector. The sector is large, well developed, and highly interconnected with other insurance markets through internationally active insurance groups and cross-border business. After having grown substantially in size, it is recommended to further strengthen the Commissariat aux Assurances’s (CAA) independence and its internal governance. The CAA’s staff has roughly doubled since the last FSAP but should be constantly reviewed with further expanding tasks. The authority’s independence could be further strengthened by safeguarding the independence of its Board members and narrowing down in the Insurance Act the reasons on which the CAA’s Directorate could be dismissed. The governance of the CAA would benefit from setting up an internal audit function, and strengthening IT governance as projects are currently conducted largely in-house.
Keywords:
solvency ASSESSMENT; International Monetary Fund Washington, d.c; solvency capital requirement; solvency coverage; G. Macroprudential supervision; Insurance; Insurance companies; Anti-money laundering and combating the financing of terrorism (AML/CFT); Solvency; Financial Sector Assessment Program; Global
Cover IMF Staff Country Reports
Kingdom of the Netherlands-The Netherlands: Financial Sector Assessment Program- Technical Note on Insurance and Pension Fund Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
This paper highlights a technical note on insurance and pension fund regulation and supervision in The Netherlands. The Dutch insurance sector is undergoing further consolidation, the life sector has been steadily shrinking over the last two decades, and the non-life market is relatively saturated. Investment exposures to real estate are increasing, and Dutch insurers are large providers of mortgage loans. Solvency ratios of Dutch insurers are well above the regulatory threshold, but below the EU average and furthermore distorted by the mechanics of the ‘Long-Term Guarantee Measures’ in Solvency II. The Dutch pension system—considered to be among the best according to international comparisons—rests on three pillars. Most pension schemes are defined-benefit pensions, which have come under pressure since 2008, when low interest rates resulted in declining funding ratio and led to an overall loss in confidence in the system. The Dutch system for independent state agencies, including De Nederlandsche Bank and Autoriteit Financiële Markten, carefully balances powers and accountability. Supervision of insurers and pension funds is effective in the Netherlands.
Keywords:
insurance regulation regime; pension fund regulation; solvency Assessment; International Monetary Fund Washington, D.C.; pension fund Sector; organization of Supervision; FSAP's finding; Pension spending; Insurance companies; Pensions; Insurance; Global
Cover IMF Staff Country Reports
Japan: Financial Sector Assessment Program-Detailed Assessment of Observance on Insurance Core Principles
International Monetary Fund. Monetary and Capital Markets Department
This paper discusses Detailed Assessment of Observance of Insurance Core Principles for the Japan Financial Sector Assessment Program. The Financial Services Agency (FSA) is the integrated regulator of financial services, including insurance but accepting the insurance activities of cooperatives. Areas of observance include licensing requirements, cooperation with other supervisors and anti-money laundering and combating the financing of terrorism. Regulatory material contains extensive requirements for licensing of insurers and the FSA works closely with applicants to assess whether they meet requirements, even if final decisions on licensing are taken by a minister. The assessment identified significant gaps in the current framework of regulation and supervision. The assessment found that, partly because of resource constraints, the FSA’s approach to insurance supervision is largely reactive. The resolution framework and process of resolution for insurers needs to be carefully reviewed. Finally, there is a need to strengthen institutional arrangements for insurance supervision. As recommended in previous assessments, the FSA’s independence should be bolstered by the delegation of insurer licensing powers currently reserved to a minister.
Keywords:
Japan FSAP; life insurer; General insurance rating Organization of Japan; earthquake insurance take-up; General insurance Association of Japan; Non-life insurance policyholder protection corporation; Insurance companies; Financial stability assessment; Insurance; Anti-money laundering and combating the financing of terrorism (AML/CFT); Solvency; Global
Cover IMF Staff Country Reports
Belgium: Financial Sector Assessment Program-Technical Note on Insurance Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
The Financial Sector Assessment Program (FSAP) conducted a focused review of insurance regulation and supervision in Belgium. This technical note (TN) provides an update on the insurance sector and highlights risks and vulnerabilities. It analyzes key aspects of regulatory and supervisory oversight: supervisor; the solvency framework; supervision (micro and macro); changes in control and portfolio transfer, reinsurance; conduct of business and group supervision and supervisory co-operation and co-ordination. Belgium has adopted a twin peaks model of regulatory oversight and supervision. The National Bank of Belgium (NBB) is responsible for prudential supervision at both a micro and macro level whilst the Financial Services and Markets Authority (FSMA) is mandated with conduct of business supervision. The analysis focuses on supervision within the scope of the NBB’s and the FSMA’s mandates. The TN comments on progress in respect of the implementation of recommendations made by the previous FSAP and offers further recommendations to strengthen the regulatory and supervisory regime.
Keywords:
risk assessment framework; pre-emptive conduct supervision; conduct risk; group supervision; NBB's role; Insurance companies; Insurance; Mortgages; Financial Sector Assessment Program; Solvency; Global
Cover IMF Working Papers
Macro-Prudential Stress Test Models: A Survey
David Aikman
,
Daniel Beale
,
Adam Brinley-Codd
,
Anne-Caroline Hüser
,
Giovanni Covi
, and
Caterina Lepore
In this paper, we survey the rapidly developing literature on macroprudential stress-testing models. The scope of the survey includes models of contagion between banks, models of contagion within the wider financial system including non-bank financial institutions such as investment funds, and models that emphasise the two-way interaction between the financial sector and the real economy. Our aim is two-fold: first, to provide a reference guide of the state-of-the-art for those developing such models; second, to distil insights from this endeavour for policy-makers using these models. In our view, the modelling frontier faces three main challenges: (a) our understanding of the potential for amplification in sectors of the non-bank financial system during periods of stress, (b) multi-sectoral models of the non-bank financial system to analyse the behaviour of the overall demand and supply of liquidity under stress and (c) stress testing models that incorporate comprehensive two-way interactions between the financial system and the real economy. Emerging lessons for policy-makers are that, for a given-sized shock hitting the system, its eventual impact will depend on (a) the size of financial institutions' capital and liquidity buffers, (b) the liquidation strategies financial institutions adopt when they need to raise cash, and (c) the topology of the financial network.
Keywords:
Stress testing; system-wide models; contagion; systemic risk; market-based finance; real-financial linkages; macro-prudential policy.; bank resilience channel; modelling frontier; bank financial system; models of contagion; variation margin; Asset liquidity; Commercial banks; Liquidity; Solvency; Global