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Europe > Ukraine

You are looking at 1 - 10 of 43 items for :

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Cover IMF Working Papers
Shocked: Electricity Price Volatility Spillovers in Europe
Serhan Cevik
and
Yueshu Zhao
European electricity markets are in the midst of unprecedented changes—caused by Russia’s invasion of Ukraine and the rise of renewable sources of energy. Using high-frequency data, this paper investigates volatility spillovers across 24 countries in the European Union (EU) during the period 2014–2024 to provide a better understanding of the transmission of risks in an international context. We develop both a static and a dynamic assessment of spillover effects and directional decomposition between individual countries. Our main findings show that about 73 percent of the forecast error variation is explained by cross-variance shares, which means only 27 percent can be attributed to shocks within each country. In other words, cross-border volatility spillovers dominate the behavior in national electricity markets in Europe—and this effect has grown over time. We also implement an augmented gravity model of bilateral volatility spillovers across power markets in the EU. Altogether, these results provide important insights to policymakers and regulators with regards to greater integration of electricity markets and infrastructure improvements that would also help with the transition to low-carbon sources of power generation and strengthen energy security in Europe.
Keywords:
Electricity prices; Volatility; Spillovers; Gravity model; Renewable energy; Electricity market reform; Europe; volatility spillover; spillover effect; markets in the EU; electricity market; Electricity; Gravity models
Cover IMF Staff Country Reports
Ukraine: Fourth Review of the Extended Arrangement under the Extended Fund Facility, Request for Modifications of a Performance Criterion, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Ukraine
International Monetary Fund. European Dept.
This paper discusses Ukraine’s Fourth Review of the Extended Arrangement under the Extended Fund Facility (EFF), Request for Modification of a Performance Criterion, and Financing Assurances Review. Ukraine’s performance remains strong under the EFF despite challenging conditions. All quantitative performance criteria for end-March were met, and all structural benchmarks through end-June were implemented on time or with a short delay. The Ukrainian economy continues to be resilient although the outlook remains subject to exceptionally high uncertainty. Sustained reform momentum and timely disbursement of external support are necessary to safeguard macroeconomic stability, restore fiscal and debt sustainability, and enhance institutional reforms to lay the path to European Union accession. Timely and predictable external disbursements together with strong domestic resource mobilization and careful liquidity management are necessary for Ukraine to meet its financing needs. Fiscal policies for the remainder of 2024, together with preparation for the 2025 budget, should be underpinned by steadfast revenue mobilization efforts aligned with the National Revenue Strategy.
Keywords:
ESBU head; ESBU law; staff appraisal; ESBU's role; investigative power; Budget planning and preparation; Financial sector stability; International reserves; Europe; Global
Cover IMF Staff Country Reports
Luxembourg: Financial Sector Assessment Program—Technical Note on Investment Funds: Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
This paper highlights a technical note on Investment Funds: Regulation and Supervision for the Luxembourg Financial Sector Assessment Program (FSAP). Commission de Surveillance du Secteur Financier (CSSF) has a robust supervisory framework with substantive improvements since the last FSAP, but some areas could be further strengthened. Given the structural importance of delegation for Luxembourg domiciled funds, initiating an on-site inspection framework for delegates outside Luxembourg assumes importance. CSSF’s enforcement framework could be substantially improved through enhancements on four key fronts. CSSF could improve the domestic regulatory framework on areas such as winding up, valuation, and approach to indirectly regulated Alternative Investment Funds AIFs. Given Luxembourg’s position as the domicile of EU’s largest IF sector, CSSF should actively continue to promote and contribute to EU level reforms on various topics. With respect to liquidity risks, CSSF should continue to actively contribute to the European Securities and Markets Authority’s (ESMA) guidance on the use of Liquidity Management Tools and to engage closely with ESMA and the EU Commission on the proposed revision of the Eligible Assets Directive.
Keywords:
managers directive; investment fund manager; Banque Centrale du Luxembourg; EU requirement; investment fund Sector; Mutual funds; Financial sector stability; Financial Sector Assessment Program; Systemic risk; Liquidity risk; Europe; Global
Cover Policy Papers
The Managing Director's Global Policy Agenda, Spring Meetings 2024: Rebuild, Revive, Renew
International Monetary Fund
The global economy has shown remarkable resilience, and appears headed for a soft landing. But buffers have been eroded, growth prospects are lackluster, and vulnerable countries are at risk of falling further behind. While inflation has fallen, it remains above target in many countries. Against this background, the key policy priorities are to: (i) rebuild buffers; (ii) revive medium-term growth; and (iii) renew the IMF’s commitment to ensure that our policies, lending toolkit, and governance are fit for purpose. Central banks need to finish the job on inflation, carefully managing its descent to target. With a soft landing in sight, policymakers’ focus needs to shift to fiscal consolidation to safeguard public finances. Reviving growth prospects will require accelerating structural reforms and joint efforts by countries to tackle transformational challenges. Firmly grounded in its mandate, working with its members, and in partnership with other international organizations, the IMF will continue to serve its members with policy advice, financial lifelines, and capacity development to help safeguard their economic and financial stability, a foundation for inclusive and sustainable growth.
Keywords:
Policy agenda; IMF surveillance; IMF-WTO dialogue; global Policy agenda; quota resource; lending capacity; Fiscal consolidation; Inclusive growth; Financial sector stability; Financial sector risk; Artificial intelligence; Global
Cover IMF Staff Country Reports
Republic of Kazakhstan: Financial Sector Assessment Program-Detailed Assessment of Observance of the Basel Core Principles for Effective Banking Supervision
International Monetary Fund. Monetary and Capital Markets Department
This paper presents Detailed Assessment of Observance of the Basel Core Principles for Effective Banking Supervision for the Republic of Kazakhstan Financial Sector Assessment Program. Along with the financial stability mandate, the Agency of the Republic of Kazakhstan for the Regulation and Development of the Financial Market (ARDFM) pursues a development objective, including by supporting the expansion of banks’ loans portfolio, which can conflict with the safety and soundness of banks and the banking system, and it is not subordinate to it. ARDFM began its activities during the coronavirus pandemic. Banks’ asset quality, while improving, remains a source of concern. However, supervisory discretion is constrained as the law enables the ARDFM to exert its motivated judgment. The ARDFM should perform a more intrusive oversight of related party transactions, including onsite reviews. In addition, the authorities should take more stringent corrective measures vis-à-vis gaps in banks’ related party framework and practices.
Keywords:
regulator's independence; prudential mandate; risk-based supervision; consolidated supervision; related parties; NPL definition; interest rate risk; AML/CFT; IMF-World Bank Financial Sector Assessment Program; Kazakhstan tenge; due diligence; adequacy ASSESSMENT process; staff team of the International Monetary Fund; banking group; risk weight assets; Internal controls; Stress testing; Credit risk; Market risk; Operational risk; Global
Cover IMF Staff Country Reports
Republic of Kazakhstan: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Kazakhstan
International Monetary Fund. Middle East and Central Asia Dept.
The 2023 Article IV Consultation with the Republic of Kazakhstan highlights that Growth is estimated to have reached 4.8 percent in 2023 and is projected to slow to 3.1 percent in 2024. Inflation declined to 9.8 percent in 2023, still well above the National Bank of Kazakhstan (NBK)’s target of 5 percent. Risks to the outlook are tilted to the downside. The state’s footprint in the economy remains large and structural reform implementation has been slow in recent years. With many uncertainties affecting the short-term outlook, monetary policy should remain tight until inflation is closer to target and inflation expectations are re-anchored. To support this, there is significant room to further strengthen the NBK’s independence and the effectiveness and credibility of monetary policy. Structural reforms are essential to advance Kazakhstan’s transition to a fully-fledged market economy and promote a more vibrant private sector that will lead future job creation and economic diversification and growth.
Keywords:
IMF TA; adjusted inflation indicator; CBDC bank cards; monetary policy committee; State social insurance Fund; quasi-government entity; Government finance statistics; Fiscal stance; Inflation; Financial Sector Assessment Program; Financial soundness indicators; Global; Central Asia and the Caucasus
Cover Policy Papers
Operational Guidance Note On Program Design and Conditionality
International Monetary Fund. Strategy, Policy, & Review Department
This note aims to provide guidance on the key principles and considerations underlying the design of Fund-supported programs. The note expands on the previous operational guidance notes on conditionality published over 2003-2014, incorporating lessons from the 2018-19 Review of Conditionality, and other recent key policy developments including the recommendation of the Management’s Implementation Plan in response to Independent Evaluation Office (IEO)’s report on growth and adjustment in IMF-supported programs. The note in particular highlights operational advice to (i) improve the realism of macroeconomic forecast in programs and fostering a more systematic analysis of contingency plans and risks; (ii) improve the focus, depth, implementation, and tailoring of structural conditions (SCs), with due consideration of growth effects; and (iii) help strengthen the ownership of country authorities. Designed as a comprehensive reference and primer on program design and conditionality in an accessible and transparent manner, the note refers in summary to a broad range of economic and policy considerations over the lifecycle of Fund-supported programs. As with all guidance notes, the relevant IMF Executive Board Decisions remain the primary legal authority on matters covered in this note.
Keywords:
Conditionality; Conditionality guidelines; Use of Fund resources; Fund-supported adjustment programs; Debt sustainability analysis; Structural reform; Fragile and conflict-affected states; transparency policy; guidance note; Fund-supported program; financing gap; climate change policy assessment; policy note; existing IMF policy; financial support; Balance of payments need; Debt sustainability; Structural reforms; Global
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 Policy Papers
Thirteenth Periodic Monitoring Report on The Status of Management Implementation Plans in Response to Board-Endorsed IEO Recommendations
International Monetary Fund. Office of Internal Audit
Overall, progress has been made since the Twelfth PMR on actions in response to eight IEO evaluations, with the pace of implementation being faster on actions October 31, 2023 THIRTEENTH PERIODIC MONITORING REPORT 2 INTERNATIONAL MONETARY FUND contained in the MIP in Response to the Executive Board-Endorsed Categorization of Open Actions in Management Implementation Plans. It is also worth mentioning that many open actions depend on the implementation of some important reviews/key steps that are expected to be completed in or soon after December 2023, such as the Capacity Development (CD) Strategy Review, the issuance of a new CD Guidance Note, an update of the Small Developing States Staff Guidance Note (SDS-SGN), the Operational Guidance Note (OGN) on Program Design and Conditionality, and a Board paper on Bank-Fund collaboration.
Keywords:
IEO evaluation; transparency policy; IEO recommendation; strategy review; Thirteenth PMR; Institutional View on capital flows; Capital flows; COVID-19; Capital account; Global; East Asia; Sub-Saharan Africa; Caribbean; Pacific Islands
Cover Policy Papers
2023 Review of The Fund's Anti-Money Laundering and Combating The Financing of Terrorism Strategy—Background Papers
International Monetary Fund. Legal Dept.
The background papers support the stocktaking analysis and the proposed way forward for the 2023 review of the IMF's AML/CFT Strategy. The five background papers provide in-depth discussions on the following key topics: (i) illicit financial flows; (ii) the impact of money laundering in financial stability; (iii) synergies between financial integrity issues and other Fund policies and work; (iv) the Fund’s collaboration with key partners in the AML/CFT global policy architecture; and (v) stakeholders’ views of the effectiveness of the Fund’s AML/CFT engagement.
Keywords:
AML/CFT; Anti-money laundering; Money laundering; Terrorism financing; Proliferation financing; Combating the Financing of Terrorism; Financial Stability; Financial Crime; Illicit financial flows; Financial Integrity; CFT issue; CFT framework; addressing IFF; FATF standard; Global AML; Anti-money laundering and combating the financing of terrorism (AML/CFT); Financial sector stability; Civil society organizations; Global; Baltics