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Europe > Norway

You are looking at 1 - 10 of 38 items for :

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Cover FinTech Notes
Cross-Border Payments with Retail Central Bank Digital Currencies: Design and Policy Considerations
Andre Reslow
,
Gabriel Soderberg
, and
Natsuki Tsuda
Many central banks are currently exploring the possibility of issuing retail central bank digital currency (CBDC). While the primary objective varies between jurisdictions, many central banks consider improved cross-border payments as a potential benefit and previous work has shown that CBDC can help overcome some of the frictions in cross-border payments. CBDC is a safe and liquid asset reducing the number of financial intermediaries and the settlement risk. Designing CBDC systems for cross-border payments is not fundamentally different from tailoring other payment systems. However, the roles and responsibilities might be slightly different in a CBDC system, and the central bank may play a more pivotal role given CBDC’s nature as public money as opposed to commercial bank money. This note draws lessons from ongoing experimentation and research to identify design and policy considerations when developing retail CBDC systems so it may be compatible for cross-border payments. The note focuses on retail CBDC—a CBDC primarily targeting households and non-financial firms—and leaves wholesale CBDC considerations for future work, although many of the discussions are applicable to wholesale CBDC and other forms of money as well.
Keywords:
central bank digital currencies; cross-border payments; fintech; foreign exchange; capital flow management; eNaira; cross-border payment; IMF Library; capital flow management measure; provider restriction; CBDC design consideration; Currencies; Anti-money laundering and combating the financing of terrorism (AML/CFT); Nonbank financial institutions; Global
Cover IMF Working Papers
Monetary Policy Pass-Through to Interest Rates: Stylized Facts from 30 European Countries
Robert C. M. Beyer
,
Ruo Chen
,
Florian Misch
,
Claire Li
,
Ezgi O. Ozturk
, and
Lev Ratnovski
The extent to which changes in monetary policy rates lead to changes in loan and deposit rates for households and firms, referred to as ‘pass-through’, is an important ingredient of monetary policy transmission to output and prices. Using data on seven different bank interest rates in 30 European countries, different approaches, and the full sample as well as a subsample of euro area countries, we show that a) the pass-through in the post-pandemic hiking cycle has been heterogenous across countries and types of interest rates; b) the pass-through has generally been weaker and slower, except for rates of non-financial corporation loans and time deposits in euro area countries; c) differences in pass-through over time and across countries for most deposit rates are correlated with financial sector concentration, liquidity, and loan opportunities, and d) the effects of pass-through to outstanding mortgage rates on monetary transmission on prices and output are heterogenous across countries.
Keywords:
Monetary Policy Transmission; Monetary Policy Pass-Through; NFC loan rate; pass-through to rate; transmission to output; Deposit rates; Central bank policy rate; Mortgages; Loans; Financial sector; Europe
Cover IMF Staff Country Reports
Nordic-Baltic Regional Report: Technical Assistance Report-Nordic-Baltic Technical Assistance Project Financial Flows Analysis, AML/CFT Supervision, and Financial Stability
International Monetary Fund. Legal Dept.
This paper presents a regional report on Nordic-Baltic technical assistance project: financial flows analysis, Anti-Money Laundering and combating the Financing of Terrorism (AML/CFT) Supervision, and Financial Stability. The purpose of the project is to conduct an analysis of cross-border ML threats and vulnerabilities in the Nordic-Baltic region—encompassing Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden (the Nordic-Baltic Constituency or NBC)—and issue a final report containing recommendations for mitigating the potential risks. The financial flows analysis presented in this report is based on the IMF staff’s analysis of cross-border payments data. Six out of the eight Nordic-Baltic countries have seen an increase in aggregate flows since 2013. Monitoring cross-border financial flows provides countries with a deeper understanding of their external ML threat environment and evolving cross-border related risks they are facing. Leveraging broader analysis of ML/TF cross-border risk, the Nordic-Baltic countries should develop their own understanding of higher-risk countries reflecting country-specific ML/TF threats.
Keywords:
TF risk assessment; colleges participation; TF risk; EU Anti-Money Laundering Authority; supervisory cooperation; information Sharin; Anti-money laundering and combating the financing of terrorism (AML/CFT); Virtual currencies; Correspondent banking; Internal controls; Financial sector stability; Baltics; Global
Cover IMF Staff Country Reports
Finland: Financial Sector Assessment Program-Technical Note on Crisis Management and Resolution
International Monetary Fund. Monetary and Capital Markets Department
This technical note focuses on Crisis Management and Resolution for the Finland Financial Sector Assessment Program. These recent developments reinforce the need for full operational readiness in the Finnish authorities’ crisis management arrangements. The authorities have made progress in developing crisis management capabilities and procedures, as well as gathering practical experience from recent events. Enhancing crisis management capacity within and between authorities is essential to ensure effective implementation in a coordinated manner of agreed crisis management plans, including for bank resolution. The authorities should increase the centralization of the coordination of the authorities’ respective preparation for, as well as management of, future crises in the Crisis Management Cooperation Group. On deposit guarantee arrangements, the Finnish Financial Stability Authority Deposit Guarantee Fund should ensure that it has sufficient funds under its direct control to ensure its financial autonomy, including through strengthened backstop funding arrangements.
Keywords:
implementing Resolution tool; crisis simulation exercise; EU bank recovery; resolution planning; C. authority crisis management capability; Crisis management; Bank resolution framework; Bank resolution; Crisis resolution; Baltics; Global
Cover IMF Working Papers
Usability of Bank Capital Buffers: The Role of Market Expectations
José Abad
Following the COVID shock, supervisors encouraged banks to use capital buffers to support the recovery. However, banks have been reluctant to do so. Provided the market expects a bank to rebuild its buffers, any draw-down will open up a capital shortfall that will weigh on its share price. Therefore, a bank will only decide to use its buffers if the value creation from a larger loan book offsets the costs associated with a capital shortfall. Using market expectations, we calibrate a framework for assessing the usability of buffers. Our results suggest that the cases in which the use of buffers make economic sense are rare in practice.
Keywords:
Capital Buffers; Basel III; Capital Regulation; Financial Institutions; Macropru; valuation model; buffer Usability; market expectation; bank Capital Structure; capital shortfall; Countercyclical capital buffers; Correspondent banking; Loans; Market capitalization; COVID-19; Global
Cover IMF Working Papers
Revisiting the Monetary Transmission Mechanism Through an Industry-Level Differential Approach
Sangyup Choi
,
Tim Willems
, and
Seung Yong Yoo
We combine industry-level data on output and prices with monetary policy shock estimates for 105 countries to analyze how the effects of monetary policy vary with industry characteristics. Next to being interesting in their own right, our findings are informative on the importance of various transmission mechanisms (as they are thought to vary systematically with the included characteristics). Results suggest that monetary contractions reduce output by more in industries featuring assets that are more difficult to collateralize, consistent with the credit channel, followed by industries producing durables, as predicted by the interest rate channel. The credit channel is stronger during bad times as well as in countries with lower levels of financial development, in line with financial accelerator logic. We do not find support for the cost channel of monetary policy, nor for a channel running via exports. Our database (containing estimated monetary policy shocks for over 170 countries) may be of independent interest to researchers.
Keywords:
Monetary policy transmission; Industry growth; Financial frictions; Asymmetry in transmissions; balance sheet channel; channel of monetary policy; differential approach; IMF working papers; monetary policy stance; Financial statements; Central bank policy rate; Exchange rates; Monetary tightening; Export fluctuations; Global; credit channel; monetary policy shock; effects of monetary policy; x MPS; shock series; Credit; Financial sector development
Cover IMF Staff Country Reports
Norway: 2021 Article IV Consultation-Press Release; Staff Report; and Staff Statement
International Monetary Fund. European Dept.
Norway’s key challenge is to get the right balance of support for recovery and adjustment until the crisis is firmly in its past. The authorities intend to continue exceptional policy support into 2021, adjusted to reflect the rebound in economic activity and pace of vaccinations in the second half of the year, and with better targeting to affected sectors. This will support the expected closing of the output gap by 2023 and help mitigate scarring, while also facilitating reallocation of capital and labor.
Keywords:
staff appraisal; corona crisis; mainland GDP; staff representative; liability positions vis-à-vis nonresident; COVID-19; Loans; Fiscal stance; Global; Europe
Cover IMF Staff Country Reports
Norway: Financial Sector Assessment Program-Technical Note-Cybersecurity Risk Supervision and Oversight
International Monetary Fund. Monetary and Capital Markets Department
The Norwegian financial system has a long history of incorporating new technology. Norway is at the forefront of digitization and has tight interdependencies within its financial system, making it particularly vulnerable to evolving cyber threats. Norway is increasingly a cashless society, with surveys and data collection suggesting that only 10 percent of point-of-sale and person-to-person transactions in 2019 were made using cash.1 Most payments made in Norway are digital (e.g., 475 card transactions per capita per annum)2 and there is an increase in new market entrants providing a broad range of services. Thus, good cybersecurity is a prerequisite for financial stability in Norway.
Keywords:
ISCR; CR; cybersecurity incident; cybersecurity risk; incident report; NSM cybersecurity principle; FSA plan; incident information; information sharing; risk management; cybersecurity risk supervision; oversight function; Cyber risk; Financial sector; Financial stability assessment; PFM information systems; Securities; Global
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 Staff Country Reports
Norway: Financial Sector Assessment Program-Technical Note-Financial Safety Nets
International Monetary Fund. Monetary and Capital Markets Department
Norway has made substantial progress in strengthening its framework for financial crisis management and bank safety nets since the 2015 FSAP. The Norwegian authorities have implemented the EU framework. The Bank Recovery and Resolution Directive (BRRD) has been transposed into the Norwegian legal framework mainly by amendments to the Financial Institutions and Financial Groups Act and accompanying regulations. Finanstilsynet (the Financial Supervisory Authority of Norway, FSA) has been designated as Norway’s resolution authority. Resolution financing options were broadened by establishing a resolution fund. While the Deposit Guarantee Scheme Directive (DGSD) has yet to be brought into the European Economic Area (EEA) agreement, Norway has, in fact, already transposed it into the Norwegian law. This provides the Norwegian authorities with a broadened and detailed regulatory framework for dealing with weak banks.
Keywords:
ISCR; CR; government stabilization tool; financial crisis; FSA decision; FSA resolution function; FSA valuation; FSA's resolution; government backstop; government employee protection; government funding; government indemnity; government support; resolution framework; resolution authority; resolution fund; resolution authorities; Financial stability assessment; Bank resolution framework; Bank resolution; Crisis management; Crisis resolution; Global; Europe