- Charles Enoch, Dewitt Marston, and Michael Taylor
- Published Date:
- September 2002
© 2002 International Monetary Fund
Production: IMF Graphics Section
Cover design: Lai Oy Louie
Cover photo: Craig Stewart/SolusImages
Library of Congress Cataloging-in-Publication Data
Building strong banks through surveillance and resolution / editors Charles Enoch, David Marston, Michael Taylor.
Includes bibliographical references (p.).
1. Banks and banking—Government policy. 2. Banks and banking—State supervision. 3. Financial institutions—Government policy. 4. Financial institutions—State supervision. 5. Monetary policy. 6. International Monetary Fund. I. Enoch, Charles. II. Marston, David. III. Taylor, Michael (Michael W.), 1962–
HG1551 .B85 2001
Address orders to:
External Relations Department, Publication Services
International Monetary Fund, Washington D.C. 20431
Telephone: (202) 623-7430; Telefax: (202) 623-7201
Charles Enoch, David Marston, and Michael Taylor
Luis Cortavarria, Claudia Dziobek, Akihiro Kanaya, and Inwon Song
Fernando L. Delgado, Daniel S. Kanda, Greta Mitchell Casselle, and R. Armando Morales
Claudia Dziobek, J. Kim Hobbs, and David Marston
Richard Abrams and Michael Taylor
David S. Hoelscher
Charles Enoch, Gillian Garcia, and V. Sundararajan
The International Monetary Fund occupies a unique vantage point from which to survey the economic and financial systems of its 184 members. In recent years its role in financial sector surveillance has expanded significantly, reflecting increased recognition of the important interactions between financial (especially banking) system soundness and macroeconomic stability. Moreover, a number of member countries have called on the IMF’s advice and assistance to help resolve banking sector problems, often in the context of IMF-supported programs. Staff of the Monetary and Exchange Affairs Department (MAE) have been at the forefront of the IMF’s efforts in these areas. In consequence, they have built up a great reserve of expertise on some highly specialized issues in both financial sector surveillance and the resolution of banking sector problems.
This book forms part of the ongoing effort of the IMF to explain the standards and principles that guide it in its work. Many chapters have their origin in papers written for internal use as a means of sharing valuable expertise among a group of colleagues. While some were subsequently revised and published in the IMF Working Paper series, many have not previously been made publicly available. Their publication in the present volume is intended to disseminate them to the largest possible audience, and we hope that the principles and policy advice they contain will be widely discussed and analyzed.
Policy advice needs to be tailored to the circumstances of individual member countries, and there can be no off-the-peg or “cookie cutter” solutions to the issues discussed in this book. On the other hand, a sound financial system is like a safe automobile: whatever the differences in styling and design between different models, safety is a function of a set of basic, unvarying principles. Therefore, although policy advice may differ from country to country, it also needs to be based on a set of common principles, which are in turn supported by sound arguments and strong evidence. The chapters of this book attempt to set out some of those principles.
The range of issues with which MAE staff have dealt over recent years is very extensive, and only a small sample of them can be considered in the space of this book. Over the coming years, the IMF will continue to work with its members to help enhance financial sector stability. In the long run our aim must be to ensure that all financial systems are sufficiently robust and supervisory capacity is sufficiently well-developed to reduce the frequency of banking problems. However, even if this goal can be achieved, there will always be a role for the kind of special expertise that the IMF’s MAE department has developed. Continuing to develop and refine its work in this area represents a major task for the staff of this Department.
Monetary and Exchange
Affairs Department, IMF
This book would not have been possible without the contribution of many people, both within the Monetary Exchange Affairs Department (MAE) and in other Departments of the International Monetary Fund. It is, first of all, one of the fruits of MAE’s ongoing work on banking sector issues, conducted first under the general guidance and supervision of the late Mr. Manuel Guitian, Director between 1995—98, and subsequently of Mr. Stefan Ingves, Director since 1999. We especially wish to record our thanks to Mr. V. Sundararajan, Deputy Director of MAE, for overseeing this project in his capacity of editor of the Operational Papers series in which many of the chapters first appeared. The individual chapters have also benefited from the comments of reviewers too numerous to mention here. However, among those who have offered comments on many—if not most—of the chapters of the book are Messrs. Tomás Baliño and Carl-Johan Lindgren. The contributions of other reviewers are recognized in each individual chapter. In addition, completion of the book has been greatly assisted by the support and encouragement offered by Mr. David Hoelscher, Mr. Marc Quintyn, and Ms. Claudia Dziobek, the last having played an especially valuable role by coordinating work on the Operational Papers. The book has also gained greatly from the editorial work performed on it by Ms. Natalie Baumer and by Mr. Jeffrey Hayden of the External Relations Department, who also coordinated the book’s production. Finally, we would like to thank Lidia Tokuda, Funke Fasalojo, Magally Bernal, and Sandra Solares for their excellent assistance in producing this volume.