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Europe > Slovenia, Republic of

You are looking at 1 - 8 of 8 items for :

  • Type: Journal Issue x
  • Financial services law & regulation x
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Cover IMF Working Papers
Calibrating Macroprudential Policies in Europe Amid Rising Housing Market Vulnerability
Ms. Laura Valderrama
Housing market developments are in the spotlight in Europe. Over-stretched valuations amid tightening financial conditions and a cost-of-living crisis have increased risks of a sustained downturn and exposed challenging trade-offs for macroprudential policy between ensuring financial system resilience and smoothing the macro-financial cycle. Against this backdrop, this paper provides detailed considerations regarding how to (re)set macroprudential policy tools in response to housing-related systemic risk in Europe, providing design solutions to avoid unintended consequences during a tightening phase, and navigating the trade-offs between managing the build-up of vulnerabilities and the macro-financial cycle in a downturn. It also proposes a novel framework to measure the effectiveness of tools and avoid overlaps by quantifying the risks addressed by different macroprudential instruments. Finally, it introduces a taxonomy allowing to assess a country’s macroprudential stance and whether adjustments to current policy settings are warranted—such as the relaxation of capital-based tools and possibly some borrower-based measures in the event of a more severe downturn.
Keywords:
Housing markets; household vulnerability; income distribution; economic cycle; financial stability; macroprudential policy.; Macroprudential policy; housing market vulnerability; Policy tool; calibrating Macroprudential policies in Europe amide; Macroprudential Policy stance framework; Countercyclical capital buffers; Mortgages; Housing prices; Credit; Europe; 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
Banks’ Adjustment to Basel III Reform: A Bank-Level Perspective for Emerging Europe
Michal Andrle
,
Vladimír Tomšík
, and
Mr. Jan Vlcek
The paper seeks to identify strategies of commercial banks in response to higher capital requirements of Basel III reform and its phase-in. It focuses on a sample of nine EU emerging market countries and picks up 5 largest banks in each country assessing their response. The paper finds that all banking sectors raised CAR ratios mainly through retained earnings. In countries where the banking sector struggled with profitability, banks have resorted to issuance of new equity or shrunk the size of their balance sheets to meet the higher capital-adequacy requirements. Worries echoed at the early stage of Basel III compilation, namely that commercial banks would shrink their balance sheet by reducing their lending to meet stricter capital requirements, did materialize only in banks struggling with profitability.
Keywords:
WP; bank; net income; balance sheet; asset; capital adequacy; Basel III; banking sector assets; cost of capital; capital adequacy ratio dynamics; increase in capital capital ratio; balance sheet growth; CAR decomposition; Income; Capital adequacy requirements; Commercial banks; Financial statements; Stocks; Europe; Baltics; Global
Cover IMF Staff Country Reports
Bulgaria: Selected Issues Paper
International Monetary Fund. European Dept.
This Selected Issues paper examines inflation dynamics in Bulgaria from January 2012 to February 2015 and highlights some stylized facts about inflation in the country. January 2012 to February 2015 is the most relevant period for identifying factors contributing to recent deflation in Bulgaria, as well as their relative importance. Regression analysis suggests that during this period the inward spillover of low inflationary pressure from the European Union to Bulgaria has been the most significant factor, which was further exacerbated by consecutive electricity price cuts in 2013 and fast-falling global commodity prices, especially since late 2014.
Keywords:
ISCR; CR; firm; price; headline inflation; core inflation; micro data; investment-to-capital ratio; firms' assets; inflation outlook; capital structures; cost structure; inflation inertia; data from the Orbis database; Inflation; Debt burden; Price controls; Financial statements; Deflation; Global
Cover IMF Staff Country Reports
Republic of Slovenia: Detailed Assessment of Observance of Basel Core Principles for Effective Banking Supervision
International Monetary Fund. Monetary and Capital Markets Department
The Slovenian banking system has been transformed by Slovenia’s accession to the European Union. Banking sector regulation and supervision is generally in line with international standards. The global crisis affected Slovenia’s economy significantly, and most banks in the system were also affected adversely. The authorities have attempted to reduce the effects of the financial crisis with several countercyclical fiscal policy measures and a program to provide liquidity to the financial sector. Strengthening the financial condition of the banking system is the key priority.
Keywords:
ISCR; CR; banking group; business plan; internal audit; management board; credit risk; central bank; Credit risk; Bank supervision; Market risk; Internal controls; Operational risk; Global
Cover IMF Staff Country Reports
Republic of Slovenia: Selected Issues
International Monetary Fund
The spike in Slovenian inflation in 2007–08 has shown how structural bottlenecks may hamper Slovenian growth in the future. This Selected Issues paper investigates the role of supply factors and demand-side effects in explaining this surge. The paper concludes that the spike in Slovenian inflation in 2007–08 was a consequence of cost-push and demand-pull factors. The supply-side factors, including the spike in commodity prices and demand-pull factors related to the business cycle, explained approximately two-thirds of the surge.
Keywords:
ISCR; CR; bank; demand-pull; price; HICP inflation; inflation differential; demand-pull factor; inflation perception; Slovenian bank; fuel price; Commercial banks; Inflation; Foreign banks; Loans; Credit; Global
Cover IMF Staff Country Reports
Republic of Slovenia: Financial System Stability Assessment Update, including Reports on the Observance of Standards and Codes on the following topics: Banking Supervision and Insurance Supervision
International Monetary Fund
This paper presents a Financial System Stability Assessment Update for Slovenia, including Reports on the Observance of Standards and Codes on Banking Supervision and Insurance Supervision. The Slovenian financial system appears sound overall but faces new challenges and risks with European Union (EU) accession and entry into the new Exchange Rate Mechanism (ERM2). These include increased competitive pressures on Slovenian banks from EU banks, and the risk to bank-asset quality from rapid credit growth triggered by very low real interest rates associated with interest rate convergence in ERM2.
Keywords:
ISCR; CR; bank; exchange rate; foreign currency; bank portfolio; interest rate margin; loan pricing; BoS banks' exchange rate risk; long position; BoS bill; interest rate convergence; loan portfolio; market infrastructure; banking sector vulnerability; banks' interest rate margin; Commercial banks; Credit risk; Stress testing; Loans; Bank soundness
Cover IMF Staff Country Reports
Slovak Republic: Selected Issues and Statistical Appendix
International Monetary Fund
This Selected Issues paper and Statistical Appendix examines external competitiveness and the exchange rate for the Slovak Republic. The paper describes two simple types of competitiveness indicators: (i) real effective exchange rate measures, which examine underlying fundamentals thought to influence external performance; and (ii) indicators of actual export performance. The results suggest that the unfavorable outcomes in the merchandise trade balance and the current account from 1996 to 1998 reflected, at least in part, competitiveness problems. The paper also presents an assessment of banking conditions and the supervision system in the Slovak Republic.
Keywords:
ISCR; CR; Slovakia; EU imports; GDP; deficit; government; EU import share; EU market; D-Mark unit labor costs; imports from Slovakia; Corporate income tax; Personal income tax; Commercial banks; Western Europe; Middle East; Central and Eastern Europe; North Africa; Baltics; East Africa; Eastern Europe