Front Matter

Copyright Page

IMF Country Report No. 21/100

FEDERATED STATES OF MICRONESIA

TECHNICAL ASSISTANCE REPORT—FINANCIAL SOUNDNESS INDICATORS MISSION

June 2021

This Technical Assistance Report paper on the Federated States of Micronesia was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed in May 2021.

Copies of this report are available to the public from

International Monetary Fund • Publication Services

PO Box 92780 • Washington, D.C. 20090

Telephone: (202) 623–7430 • Fax: (202) 623–7201

E-mail: publications@imf.org Web: http://www.imf.org

Price: $18.00 per printed copy

International Monetary Fund

Washington, D.C.

© 2021 International Monetary Fund

Title Page

FEDERATED STATES OF MICRONESIA

TECHNICAL ASSISTANCE REPORT ON THE FINANCIAL SOUNDNESS INDICATORS MISSION (NOVEMBER 2–13, 2020)

MAY 2021

Prepared by Mahmut Kutlukaya

The contents of this report constitute technical advice provided by the staff of the International Monetary Fund (IMF) to the authorities of Federated States of Micronesia (the “TA recipient”) in response to their request for technical assistance. This report (in whole or in part) or summaries thereof may be disclosed by the IMF to IMF Executive Directors and members of their staff, as well as to other agencies or instrumentalities of the TA recipient, and upon their request, to World Bank staff, and other technical assistance providers and donors with legitimate interest, unless the TA recipient specifically objects to such disclosure (see Operational Guidelines for the Dissemination of Technical Assistance Information). Publication or Disclosure of this report (in whole or in part) or summaries thereof to parties outside the IMF other than agencies or instrumentalities of the TA recipient, World Bank staff, other technical assistance providers and donors with legitimate interest, shall require the explicit consent of the TA recipient and the IMF’s Statistics Department.

Contents

  • Glossary

  • SUMMARY OF MISSION OUTCOMES AND PRIORITY RECOMMENDATIONS

  • DETAILED ACTION PLAN

  • INTRODUCTION

  • A. Background

  • B. FSM’s Financial System

  • DETAILED TECHNICAL ASSESSMENT AND RECOMMENDATIONS

  • A. Consolidation Basis and Institutional Coverage

  • B. Accounting and Regulatory Frameworks Underlying the FSI Data

  • C. Source Data

  • D. Compilation Framework

  • E. New FSI Report Forms

  • F. FSI Metadata

  • G. FSI Data and Metadata Reporting

  • H. FSIs for Other Sectors

  • I. Resources, Training, and Technical Cooperation

  • J. Other Issues

  • TABLES

  • 1. FSM: Priority Recommendations

  • 2. FSM: The Financial Sector in FSM

  • 3. FSM: Loans Classification and Provisioning Rules for Commercial Banks

  • 4. FSM: Reporting Forms

  • APPENDICES

  • I. Financial Soundness Indicators

  • II. Officials Met During the Mission

  • III. Summary of Recommended Amendments to the FSI Definitions

  • IV. FSI Metadata for Deposit Takers

Glossary

APD

IMF’s Asia & Pacific Department

CBCSDI

Cross-border, Cross-sector, Domestically Incorporated consolidation basis

CFA

Compact of Free Association

DL

Domestic location basis

DT

Deposit taker

FAS

Financial Access Survey

FDIC

Federal Deposit Insurance Corporation

FFIEC

Federal Financial Institutions Examination Council

FS2

Sectoral financial statements and memorandum series template

FSD

Sectoral financial soundness indicators template

FSI

Financial soundness indicator

FSI Guide

Financial Soundness Indicators Compilation Guide 2019

FSM

Federated States of Micronesia

FSMBB

Federated States of Micronesia Banking Board

FSMDB

Federated States of Micronesia Development Bank

FSMIB

Federated States of Micronesia Insurance Board

FX

Foreign exchange

IAS

International Accounting Standards

ICS

Integrated Collection System

IMF

International Monetary Fund

MFS

Monetary and Financial Statistics

NPL

Nonperforming loans

NSDP

National Summary Data Page

OCI

Other comprehensive income

PFTAC

Pacific Financial Technical Assistance Centre

ROA

Return on assets

ROE

Return on equity

RWA

Risk-weighted asset

SNA

System of National Accounts

SRF

Standardized report forms

STA

IMF’s Statistics Department

TA

Technical assistance

US GAAP

United States Generally Accepted Accounting Principles

Federated States of Micronesia: Technical Assistance Report-Financial Soundness Indicators Mission
Author: International Monetary Fund. Statistics Dept.