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Law > Business and Financial

You are looking at 1 - 10 of 46 items for :

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  • Financial risk management x
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Cover High-Level Summary Technical Assistance Reports
Grenada: Systemic Risk Monitoring
Petr Jakubik
The technical assistance aimed to build capacity to monitor and assess systemic risk for non-bank financial institutions in the Grenada Authority for the Regulation of Financial Institutions (GARFIN). The mission underlined the need to clarify the macroprudential mandate and cooperation with the ECCB to conduct the macroprudential work accordingly. A potential extension of the existing Annual Report and Accounts covering key financial stability indicators and their assessment could be considered. It further highlighted the need to revise the existing reporting templates to reflect systemic risk better. Finally, the important role of the data management system was underlined.
Keywords:
contagion risk; pension balance sheets; IMF capacity development recipient; Systemic risk assessment; Financial sector stability; Financial sector risk; Stress testing; Caribbean
Cover IMF Staff Country Reports
Kingdom of the Netherlands-The Netherlands: Financial Sector Assessment Program- Technical Note on Securities Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
This paper describes a technical note on securities regulation and supervision in The Netherlands. Regulation of securities and derivatives markets in the European Union (EU) has changed materially since the last Netherlands Financial Sector Assessment Program (FSAP), with further reforms underway. The securities market landscape in the Netherlands has also changed markedly since the last FSAP, largely in response to Brexit. The Netherlands is now of EU-wide significance in relation to the trading of securities, particularly equities, which has brought challenges for the national authorities. Further enhancements of its approach and a continuing focus on trading system operational resilience are now needed. The established venues are growing and diversifying their offerings, and ‘fintech’ new entrants with business models combining trading and post-trading operations in new ways are on the horizon. Enhancements to the legislative framework are now needed to ensure that the Autoriteit Financiële Markten can continue to supervise efficiently and effectively an expanded and more diverse market, and to engage credibly with international counterparts.
Keywords:
trading venue; managers directive; markets authority; trading obligation; money market funds; Financial Sector Assessment Program; Liquidity management; Liquidity; Liquidity risk; Financial derivatives; Europe; Global
Cover Technical Assistance Reports
Jordan: Technical Assistance Report-Developing Supervisory Review and Evaluation Process SRP Framework
International Monetary Fund. Middle East and Central Asia Dept.
The International Monetary Fund (IMF)’s Middle East Regional Technical Assistance Center (METAC) is currently assisting the Central Bank of Jordan (CBJ) in enhancing its risk-based supervision through the development of a Supervisory Review and Evaluation SRP framework inspired from European Central Bank (ECB) methodology. The Technical Assistance TA mission is part of a multi-step medium-term project. The TA mission aimed to design, in coordination with CBJ, a progressive multi-step roadmap defining the major milestones for a full implementation of SRP. The mission noted that several dimensions should be taken into consideration when implementing the SRP, most notably bridging the data gap by building a fully-fledged supervisory risk database through a dedicated IT project, assessing whether the current organization of the Banking Supervisory Department should be adjusted, and progressively cover all material sources of risks in the SRP.
Keywords:
evaluation process SRP framework; SRP framework; CBJ's supervision staff; SRP approach; IMF's Monetary; Bank supervision; Commercial banks; Risk-based supervision; Credit risk; Global
Cover IMF Staff Country Reports
Republic of Kazakhstan: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
This paper presents Republic of Kazakhstan’s Financial System Stability Assessment report. In 2024, Kazakhstan’s economic growth is expected to slow to 3.1 percent, mostly due to delays in expanding the Tengiz oil field, while inflation, which is still well above the authorities’ target, would continue to decline. The authorities have continued their efforts to secure macroeconomic stability. The National Bank of Kazakhstan maintained tight monetary policy throughout 2023. The authorities remain committed to medium-term fiscal consolidation and have undertaken significant efforts to increase trade diversification and address governance and corruption vulnerabilities. According to the recently completed Financial Sector Assessment Program, the banking system appears well capitalized in aggregate. Kazakhstan is exposed to transition risk from domestic and global climate policies. Banking supervision has become more risk-based, but related party transactions remain challenging to monitor and consolidated supervision is still incomplete. Finally, there remain gaps in the financial safety nets and crisis management arrangements.
Keywords:
FSAP finding; Tier 1; kazakhstani tenge; FX assets; Kazakhstan stock exchange; NBK policy rate; consumer lending; instability episode; nonfinancial corporate; headline inflation; asset concentration risk; liquidity shock; ARDFM power; liquidity forbearance measure; Kazakhstan financial system; loan portfolio; cash flow; Financial Sector Assessment Program; Financial sector stability; Loans; Commercial banks; Global
Cover IMF Staff Country Reports
Maldives: Financial System Stability Assessment; and Press Release
International Monetary Fund. Monetary and Capital Markets Department
This paper presents financial system stability assessment (FSSA) report for Maldives. Maldives is a tourism dependent economy with a small financial sector dominated by state-owned banks. Systemic risks stem largely from a growing sovereign-bank nexus, high dollarization, and a shortage of foreign exchange. The Financial Sector Assessment Program concluded that further strengthening of financial sector policies is needed to improve the resilience of the financial system. The authorities should adopt regulation to address frictions in the foreign exchange market, resume liquidity management operations and develop systemic risk indicators. Priority should also be given to establishing a macroprudential framework along with instruments, publishing a financial stability report, and ensuring full reporting of non-bank payment obligations. The financial safety net and crisis management arrangements should be enhanced by improving early intervention mechanisms, introducing recovery and resolution planning, and enhancing the deposit insurance system. In addition, an effective liquidity assistance framework should be established.
Keywords:
World Bank FSAP mission; risk analysis; IMF FSAP stress test result; MMA central government debt holding; FSAP finding; bank capitalization; Financial Sector Assessment Program; Stress testing; Financial sector stability; Global; Asia and Pacific
Cover IMF Staff Country Reports
Belgium: Financial Sector Assessment Program-Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
This paper focuses on the report on Belgium’s Financial Sector Assessment Program. Economic activity has slowed, core inflation remains high, and the fiscal outlook is challenging. The financial sector has remained resilient despite a series of shocks. Key financial stability risks emanate from the large, concentrated, and interconnected banking sector, private sector indebtedness, and high exposure to real estate. Bank solvency stress tests indicate that the financial sector is resilient under severe macroeconomic shocks. Although there is some heterogeneity across financial institutions, all banks would satisfy the minimum capital criteria. The authorities should enhance the National Bank of Belgium’s powers to set macroprudential policy in line with its financial stability mandate. In the near term, the extension/ setting of capital requirements should be streamlined, without the requirement for government approval. There is scope to strengthen the corporate governance framework and expectations for banks, and boost prudential supervisory staffing, especially given upcoming regulatory developments.
Keywords:
bank solvency stress tests; insurance solvency stress test; NBB coordination; corporate governance framework; cash flow; B. bank Oversight; market share; Stress testing; Financial sector stability; Insurance companies; Financial Sector Assessment Program; Global; Europe
Cover IMF Staff Country Reports
Nepal: Technical Assistance Report—Financial Sector Stability Review
International Monetary Fund. Statistics Dept.
and
International Monetary Fund. Monetary and Capital Markets Department
This Technical Assistance (TA) paper on Nepal highlights the financial sector stability review. The mission conducted a diagnostic review of the financial sector oversight capacity and proposed a Technical Assistance Roadmap (TARM) to support the authorities’ efforts to strengthen the identification, analysis, and mitigation of risks to financial stability in Nepal. The Nepal Rastra Bank has developed its approach to supervision and continuing to strengthen its capacity will help improve the resilience of the banking sector. Payment systems modernization efforts have gained momentum, but further progress is needed to improve the safety and efficiency of payment systems to support monetary policy and financial stability. Financial sector statistics in Nepal have scope for improvement. Currently, the monetary and financial statistics cover the central bank, and other depository corporations comprising of commercial banks, development banks, and finance companies, which accept deposits. The mission’s diagnostic review supports a TA plan. The main recommendations are summarized and the comprehensive TARM is provided in this paper.
Keywords:
working capital; Nepal FSSR TA roadmap; liquidity regulation; request of the Nepal Rastra Bank; NRB regulation; payment legislation; NRB senior management; IMF to IMF executive directors; IMF MCM; macro-financial risk; payment Systems Department; modernization effort; NRB staff; Payment systems; Stress testing; Real time gross settlement systems; Financial sector stability; Global
Cover IMF Staff Country Reports
Botswana: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
This paper discusses financial system stability assessment in Botswana. Botswana’s financial sector, which exhibits high integration between banks and non-bank financial institutions, withstood the pandemic well. The economic recovery continues to be strong, but inflation remains high with risks tilted to the upside. The financial sector appears broadly stable, sound, and resilient. Main risks relate to banks’ high concentration of lumpy short-term deposits from retirement funds and insurance companies, volatility in diamond prices, geo-political developments, and the tightening of global financial conditions. The challenging risk environment underscores the need to address the existing gaps in the financial stability framework and the supervisory regime that could impede Bank of Botswana’s operational independence in supervisory matters. The banking supervision approach should be more risk-based and forward-looking, with more skilled staff who can identify emerging risks in the more complex banking sector. Specific regulations for material risks should be issued and Pillar 2 supervisory assessments developed for more risk-sensitive capital requirements. Data gaps should be addressed to enable the implementation of stress tests on a globally consolidated basis, perform more granular analyses of household and corporate sector vulnerabilities, and activate macroprudential tools.
Keywords:
B. bank solvency stress tests; risk analysis; bank rating methodology; bank risk analysis; bank solvency stress tests; Nonbank financial institutions; Commercial banks; Financial sector stability; Credit; Global
Cover IMF Staff Country Reports
Ecuador: Financial System Stability Assessment
International Monetary Fund. Monetary and Capital Markets Department
This paper discusses financial system stability assessment (FSSA) in Ecuador. Banks and credit cooperatives dominate Ecuador’s financial system. While dollarization provides an important anchor for the Ecuadorean economy, systemic liquidity risks are high due to the limited capacity of the central bank to provide liquidity. The financial sector is overall resilient to adverse macrofinancial shocks but some institutions have meaningful solvency and liquidity vulnerabilities. To preserve confidence it is key to enhance capitalization, promptly recognize loan losses, and address unviable institutions. The FSSA concluded that institutional framework for financial sector oversight is complex, uncoordinated, and prone to political intervention. Reforms are needed to enhance supervisory independence, prioritize safety and soundness; separate prudential supervision from other functions, and substantially strengthen the supervisory approach. The macroprudential framework needs further progress by developing stronger financial sector-wide analytical capacity, improving information sharing and coordination, and clarifying the roles between multiple agencies.
Keywords:
B. bank solvency stress tests; liquidity fund; World Bank FSAP mission; emergency liquidity assistance facility; lender-of-last resort function; liquidity vulnerability; liquidity condition; liquidity analysis; Credit; Financial Sector Assessment Program; State-owned banks; Loans; Global; Caribbean
Cover IMF Staff Country Reports
Finland: Financial System Stability Assessment
International Monetary Fund. European Dept.
This paper presents Finland’s Financial System Stability Assessment report. Finland has further improved the regulation and supervision of its financial sector since the 2016 Financial Sector Assessment Program, in part driven by European legislation and institutions. The size of the banking sector increased significantly in 2018 with the redomicilation of Nordea. Finland weathered the coronavirus disease 2019 pandemic well relative to other economies, with fiscal support and interventions from the authorities. However, Finland is now navigating a weaker economic outlook given the war in Ukraine and ensuing energy crisis, despite limited direct financial exposures to Russia. Risks to financial stability come from a large banking sector, which is highly concentrated and dominated by a few institutions, and is interconnected with other financial systems in the Nordic region. Stress tests indicate that the banking system appears resilient to severe macro-financial shocks but remains vulnerable to liquidity shocks. Resolution and crisis management should be supported by greater coordination of authorities’ preparation and management of future crises.
Keywords:
MoSAH FIN-FSA; PIC solvency regulation; independence of the FIN-FSA; SREP assessment; FIN-FSA's independence; B. banking sector resilience; Financial Sector Assessment Program; Macroprudential policy; Credit; Financial sector stability; Baltics; Global