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Europe > Ireland

You are looking at 1 - 9 of 9 items for :

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Cover IMF Staff Country Reports
Norway: Financial Sector Assessment Program-Technical Note-Systemic Risk Oversight and Macroprudential Policy Framework
International Monetary Fund. Monetary and Capital Markets Department
While Norway’s institutional arrangement for macroprudential policy is uncommon, the authorities have shown strong willingness to act. The Ministry of Finance (MoF) is the sole macroprudential decision-maker in Norway, which is rare in international comparison. However, Norges Bank and the Finanstilsynet (FSA) play important advisory roles. In recent years, the authorities have taken substantive and wide-ranging macroprudential policy actions in response to growing systemic vulnerabilities—and these seem to have been effective in slowing down some of the riskier trends. The macroprudential policy toolkit is well stocked and actively used.
Keywords:
ISCR; CR; CRE sector; CRE market; CRE company; CRE risk; FSA survey; liquid asset; central bank; foreign currency; mortgage loan; financial system; Macroprudential policy; Financial stability assessment; Macroprudential policy instruments; Financial sector stability; Countercyclical capital buffers; Global; Mortgages
Cover IMF Working Papers
Forbearance Patterns in the Post-Crisis Period
Katharina Bergant
and
Thore Kockerols
Using supervisory loan-level data on corporate loans, we show that banks facing high levels of non-performing loans relative to their capital and provisions were more likely to grant forbearance measures to the riskiest group of borrowers. More specifically, we find that risky borrowers are more likely to get an increase in the overall limit or the maturity of a loan product from a distressed lender. As a second step, we analyse the effectiveness of this practice in reducing the probability of default. We show that the most common measure of forbearance is effective in the short run but no forbearance measure significantly reduces the probability of default in the long run. Our evidence also suggests that forbearance and new lending are substitutes for banks, as high shares of forbearance are negatively correlated with new lending to the same group of borrowers. Taken together, these findings can help policy makers shape surveillance and regulation in a future recovery from the Covid-19 pandemic.
Keywords:
WP; risky borrower; outstanding balance; x Time; bank characteristic; borrower rating; interest rate; Time level; rating class; Loans; Nonperforming loans; Capital adequacy requirements; Credit; Credit risk; Global; Non-Performing Loans; Zombie Lending; Banking Regulation
Cover IMF Working Papers
Heterogeneity of Bank Risk Weights in the EU: Evidence by Asset Class and Country of Counterparty Exposure
Ms. Rima A Turk
Concerns about excessive variability in bank risk weights have prompted their review by regulators. This paper provides prima facie evidence on the extent of risk weight heterogeneity across broad asset classes and by country of counterparty for major banks in the European Union using internal models. It also finds that corporate risk weights are sensitive to the riskiness of an average representative firm, but not to a market indicator of a firm’s probablity of default. Under plausible yet severe hypothetical scenarios for harmonized risk weights, counterfactual capital ratios would decline significantly for some banks, but they would not experience a shortfall relative to Basel III’s minimum requirements. This, however, does not preclude falling short of meeting additional national supervisory capital requirements.
Keywords:
WP; risk weight; risk; bank; bank risk measure; Bank Capital; Regulation; Risk Weights; Basel III; bank portfolio risk; SA portfolio decomposition; market risk share; portfolio risk weight; risk weights capture; IRB risk weight; capital framework; credit exposure; IRB portfolio share; risk component; Capital adequacy requirements; Credit risk; Mortgages; External balance assessment (EBA); Credit; Europe; Global
Cover IMF Working Papers
The Chicago Plan Revisited
Mr. Michael Kumhof
and
Mr. Jaromir Benes
At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.
Keywords:
WP; interest rate; money supply; Chicago Plan; Chicago School of Economics; 100% reserve banking; bank lending; lending risk; private money creation; bank capital adequacy; government debt; private debt; boom-bust cycles; banking system; nominal interest rate; money demand; business cycle; cash flow; money creation; financial system; treasury credit; monetary policy; opportunity cost; Credit; Loans; Bank credit; Financial statements; Middle East; Europe
Cover IMF Staff Country Reports
Czech Republic: Technical Note on Selected Issues on the Credit Union Sector
International Monetary Fund
This technical note focuses on selected issues on the credit union (CU) sector in the Czech Republic. The business models of CUs in the Czech Republic are fundamentally different from traditional CUs that are typically non-for-profit cooperatives operated for the benefit of a defined set of members. The paper highlights that there is a need to restructure the CU sector, aimed at striking a delicate balance between minimizing financial and supervisory risks arising from the sector while recognizing the social role of prudently managed CUs.
Keywords:
ISCR; CR; CNB; loan; CUs; bank; asset; CNB rule; liquidity window; inspection finding; CU sector; loan ratio; client deposit; operating income; asset base; loan portfolio; financial condition; banking assets; supervisory scope; Loans; Nonperforming loans; Credit; Capital adequacy requirements; Credit bureaus
Cover IMF Working Papers
Equity Returns in the Banking Sector in the Wake of the Great Recession and the European Sovereign Debt Crisis
Mr. Jorge A Chan-Lau
,
Miss Estelle X Liu
, and
Jochen M. Schmittmann
This study finds that equity returns in the banking sector in the wake of the Great Recession and the European sovereign debt crisis have been driven mainly by weak growth prospects and heightened sovereign risk and to a lesser extent, by deteriorating funding conditions and investor sentiment. While the equity return performance in the banking sector has been dismal in general, better capitalized and less leveraged banks have outperformed their peers, a finding that supports policymakers’ efforts to strengthen bank capitalization.
Keywords:
WP; bank; equity; capital ratio; funding; Tier 1; Banks; equity returns; financial crisis; sovereign risk; sovereign debt crisis; economic growth; regulatory capital; panel data econometrics; banking sector; equity price; return performance; equity return; investor base; Tier 1 capital ratio; CDS spread; bank CDS premia; Stocks; Capital adequacy requirements; Yield curve; Commercial banks; Global
Cover IMF Staff Country Reports
Germany: Technical Note on Stress Testing
International Monetary Fund
This note summarizes the stress tests undertaken for the German banking system as part of the Financial Sector Assessment Program (FSAP) update. Solvency tests for the German banking system assessed medium-term vulnerabilities under two adverse macroeconomic scenarios. The tests considered a variety of measures of soundness, and took into account funding costs, sovereign risk, upcoming changes in the regulatory rules, and behavioral changes of banks. The test results revealed that German banks are robust against many shocks, and that important vulnerabilities still remain.
Keywords:
ISCR; CR; bank; capital ratio; capital; Tier 1; put option; debt holder; Grouping bank; banking system; percentage share; bank liability; large bank; conservation buffer; bank's CDS; sensitivity analysis; credit risk; Stress testing; Basel III; Systemic risk; Capital adequacy requirements; Personal income; Global
Cover IMF Staff Country Reports
Euro Area Policies: Spillover Report for the 2011 Article IV Consultation and Selected Issues
International Monetary Fund
The euro area (EA) plays a major role in the global economy. Market perceptions of events in the EA program countries illustrate the possibility of large spillovers from the area in times of stress. The prospect of large spillovers underscores the urgent need for actions to contain, and eventually overcome, the ongoing crisis. The planned fiscal consolidation in the EA could benefit the rest of the world. Spillovers from gradual monetary policy normalization appear manageable. Execution of the structural reform agenda will carry positive spillovers.
Keywords:
ISCR; CR; EA European; bank; EA bank; market; EA program country; asset market; EA growth shock; EA authorities; core EA; Spillovers; Fiscal consolidation; Exports; Foreign banks; Capital adequacy requirements; Global; Asia and Pacific; North Africa
Cover IMF Staff Country Reports
Ireland: Extended Arrangement-Interim Review Under the Emergency Financing Mechanism
International Monetary Fund
The Executive Board approved a three-year Extended Arrangement under the Extended Fund Facility (EFF) for Ireland under the exceptional access policy and Emergency Financing Mechanism (EFM). Political developments have been turbulent. The authorities are moving ahead with a comprehensive strategy to restore confidence in the banking sector. The program objectives for the financial sector, while simple and straightforward, require complex strategies for implementation. Efforts are under way to address data gaps and further strengthen data quality. Robust procedures for program monitoring have been established.
Keywords:
ISCR; CR; asset; government; Ireland; bank; ECB criteria; capital ratio; bank capital; asset market; bank data; Commercial banks; Stress testing; Capital adequacy requirements; Asset valuation; Credit