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Law > Business and Financial

You are looking at 1 - 10 of 14 items for :

  • Type: Journal Issue x
  • Crisis management x
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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 IMF Staff Country Reports
Democratic Republic of the Congo: Technical Assistance Report-Financial Sector Stability Review
International Monetary Fund. Monetary and Capital Markets Department
In response to a request from the Central Bank of the Congo (BCC), the Monetary and Capital Markets Department of the International Monetary Fund (IMF) conducted a Financial Sector Stability Review (FSSR) mission virtually, during January 5–28, 2022. The FSSR performed a diagnostic of the financial system, reviewed progress in implementing previous IMF technical assistance (TA) recommendations, and developed a draft Technical Assistance Roadmap to help strengthen the BCC’s capacity in the areas covered by the FSSR. The FSSR also for the first-time covered gender inclusion in financial supervision. It identified five macrofinancial vulnerabilities pertaining to: (i) the quality of the banking system’s capital base; (ii) the difficulty in evaluating nonperforming loans following the COVID 19 financial support measures; (iii) risks related to financial dollarization; (iv) the impact on correspondent banking relationships of “de-risking”; and (v) intragroup exposures, as bank subsidiaries in the DRC place surplus funds with parent companies abroad. The BCC’s adoption of COVID-19 exit measures in December 2021, including specific reporting requirements, should provide momentum for additional TA in the near term to help the BCC analyze banks’ asset quality going forward.
Keywords:
bank stress tests; bank funding; IMF resident representative; draft banking law; bank resolution function; Financial sector stability; Stress testing; Bank supervision; Bank resolution framework; Central Africa; Africa; Maghreb; Global
Cover IMF Staff Country Reports
Philippines: Financial System Stability Assessment-Press Release and Statement by the Executive Director for the Philippines
International Monetary Fund. Monetary and Capital Markets Department
GDP contracted by 9½ percent in 2020—a much steeper decline than during the Asian Financial Crisis (AFC)—but it is now recovering with the easing of containment measures and economic policy support. Banks are closely connected to the corporate sector through high credit exposures and conglomerate ownership linkages. The Financial Action Task Force (FATF) may list the Philippines as a jurisdiction with serious Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) deficiencies in 2021. The country is also vulnerable to climate change (physical) risks, especially the destruction of physical capital from typhoons.
Keywords:
bank secrecy law; BSP charter; bridge bank authority; secrecy law; government financial institutions; Financial sector stability; Loans; Anti-money laundering and combating the financing of terrorism (AML/CFT); Financial Sector Assessment Program; Global; Asia and Pacific
Cover IMF Staff Country Reports
Indonesia: Financial System Stability Assessment-Press Release and Statement by the Executive Director for Indonesia
International Monetary Fund. Monetary and Capital Markets Department
This paper assesses the stability of Indonesia’s financial system. Since the 2010 Financial Sector Assessment Program, Indonesia’s macroeconomic performance has been robust and the financial system has been stable. Systemic risk is low and the banking system appears generally resilient to severe shocks. Market-based indicators point to relatively low levels of systemic risk. Under severe stress-test scenarios, banks experience sizable credit losses, particularly from corporate exposures, but high capital levels and strong profitability help absorb most of these losses. Many banks face relatively small shortfalls in liquidity stress tests, including in foreign currency, and these appear manageable for Bank Indonesia.
Keywords:
ISCR; CR; crisis Law; authority; emergency liquidity assistance framework; OJK; assets equal; BI Law; FX liquidity coverage regulation; Financial sector stability; Commercial banks; Crisis management; Stress testing; Global
Cover IMF Working Papers
Corporate Restructuring and Its Macro Effects
Mr. Jongsoon Shin
This paper describes issues in Korea’s corporate sector, the need for restructuring, and the authorities’ initiatives and challenges. It then identifies lessons from other countries’ experience and conducts an econometric analysis based on cross-country aggregate data, compared with previous studies which mostly use firm-level data. This analysis finds that restructuring episodes, while sometimes challenging in the short term, have typically been associated with more rapid economic growth afterward. Corporate restructuring could have a negative effect on the labor and the financial markets in the short term, but is associated with positive growth through increased investment and capital productivity in the medium term, outpacing the negative effects.
Keywords:
WP; firm; debt; restructuring dummy; bank; corporate; Corporate debt; restructuring; macro effects; investment; unemployment; debt restructuring; shipping firm; firm structuring; debt-distressed firm; Debt restructuring; Capital productivity; Creditor bail-in; Global
Cover IMF Staff Country Reports
Bosnia and Herzegovina: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
This paper discusses key findings of the Financial System Stability Assessment on Bosnia and Herzegovina (BiH). The financial system in BiH is still dealing with the aftershocks of the global financial crisis as well as deep-seated vulnerabilities. A high system-wide nonperforming loan ratio reflects the impact of the crisis, low growth since then, and a history of lax lending policies. Bank governance problems, weak supervision powers, and related-party loans are obstacles to addressing asset quality problems and re-establishing bank profitability. Banking and insurance oversight have improved since the 2006 Financial Sector Assessment Program, but supervisors’ corrective and enforcement powers are weak and identifying ultimate beneficial owners and related-party lending is problematic.
Keywords:
ISCR; CR; bank; authority; authorities of Bosnia and Herzegovina; Bosnia and Herzegovina's authorities; deposit insurer; standing liquidity facility; re-establishing bank profitability; Commercial banks; Bank resolution framework; Stress testing; Financial Sector Assessment Program; Insurance companies; Global
Cover IMF Staff Country Reports
South Africa: Financial Sector Assessment Program-Financial Safety Net, Bank Resolution, and Crisis Management Framework-Technical Note
International Monetary Fund. Monetary and Capital Markets Department
This Technical Note discusses recommendations made during the Financial Sector Assessment Program (FSAP) for South Africa in the areas of contingency planning, crisis management, and bank resolution. The proposed scope of the new resolution regime and of the South African Reserve Bank’s (SARB) jurisdiction as the resolution authority remains unclear. It is suggested that authorities should consider focusing on all deposit-taking institutions and only those other financial institutions that are currently deemed systemic. Non-deposit-taking financial institutions that are not found to be systemic should be resolved by the Prudential Authority or the Market Conduct Authority, whichever is the lead regulator.
Keywords:
ISCR; CR; resolution authority; SARB debentures rate; SARB-issued debenture; SARB announcement; money market; SARB Guidance note; SARB repo rate; SARB guideline; SARB governor; judicial review; SARB's function; regulatory authority; bank merger; Bank resolution framework; Financial sector stability; Crisis management; Legal support in revenue administration; Africa
Cover IMF Staff Country Reports
Republic of Korea: Financial Sector Assessment Program-Crisis Preparedness and Crisis Management Framework-Technical Note
International Monetary Fund. Monetary and Capital Markets Department
Korea experienced significant financial distress in the late 1990s along with some of its Asian neighbors. The authorities’ experience in handling this crisis and the experience in handling the fallout from the global financial crisis in 2007–08 helped them establish a broad crisis management framework in Korea. Improving and formalizing the framework for crisis management would help preserve and build upon institutional memory. Authorities can consider formally setting up an apex forum for leading the inter-agency cooperation and coordination work on crisis preparedness and crisis management. With a view to avoid duplication, the authorities may consider upgrading the Macroeconomic Financial Meeting (MEFM) with participation by the heads of the Ministry of Strategy and Finance (MOSF), Financial Services Commission (FSC), Financial Supervisory Service (FSS), Bank of Korea (BOK), and Korea Deposit Insurance Corporation (KDIC) as members, and by including crisis preparedness and crisis management as an explicit mandate. The essential elements of a financial safety net are available in Korea, and the Emergency Liquidity Assistance (ELA) framework and deposit insurance system can be improved to make the safety net more responsive. For ELA, this can be achieved by reviewing and revising the legal and procedural aspects to remove any scope for delays in actual disbursement of funds. For deposit insurance system, improvements can be made by bringing the deposit insurance fund out of deficit, and assuring a back-up funding. The financial safety net is well supported by an efficient framework of financial sector supervision. While the corrective action framework has some of the main elements in place it can, among others, be improved in the following areas for better effectiveness: (a) reviewing the triggers for corrective actions and improving their objectivity to enable timely intervention, including even before banks breach regulatory thresholds; and (b) putting in place norms and guidance determining the use of the powers to postpone or suspend corrective actions.
Keywords:
ISCR; CR; bank deposit; financial crisis; banking sector; KDIC power; public funds; insurance fund; capital ratio; payment suspension; holding company; financial support; due diligence; cross subsidization; bond market; Crisis management; Crisis prevention; Deposit insurance; Global
Cover IMF Staff Country Reports
Brazil: Financial System Stability Assessment
International Monetary Fund
The paper discusses the stability of Brazil's financial system, which is diversified and shows sustained economic progress. Fiscal and monetary policies have been aimed to improve bank reserves, and foreign exchange intervention has been streamlined to curb volatility in the exchange market. These measures have been effective in achieving the immediate targets, maintaining macroeconomic stability, and ensuring adequate financial sector buffers. However, there are indications of emerging strains in some sectors and asset classes.
Keywords:
ISCR; CR; central bank; bank supervision; exchange rate; financial system; debt service; medium bank; interest rate; reverse repo; liquidity ratio; bond market; investment funds; foreign exchange; credit risk; bridge bank statute; Credit; Financial sector stability; Loans; Global
Cover IMF Staff Country Reports
Macao Special Administrative Region of the People's Republic of China: Financial Sector Stability Assessment
International Monetary Fund
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
Keywords:
ISCR; CR; AMCM; bank; loan; deposit; Macao SAR; parent bank; resolution process; risk strategy; financial condition; Deposit insurance; Commercial banks; Financial sector; Loans; Global