Following a review and assesment of recent developments in capital market and banking systems, this year's International Capital Markets report review and assesses recent developments in mature and emerging financial markets and continues the analysis of key issues affecting global financial markets. It examines the systemic implications of the continued rapid development of the global over-the-counter derivatives markets and the expansion of foreign-owned banks into emerging markets. The report also analyzes market participants assessments of the proposals for private sector involvement in the prevention and resolution of crises.
This report presents a description of the stress test exercises for Spain’s banking and insurance systems. The exercises were carried out in the context of the Financial Sector Assessment Program with the aim of assessing the resilience of the financial system to key risks. It describes the coverage of the exercises, the risks considered, the magnitude of the shocks to the risk factors, the models and instruments, and the results. It presents the stress test methodology and also the stress tests for the banking system and insurance.
This paper reviews key findings of the IMF’s Annual Report for the fiscal year ended April 30, 1981. The report highlights that the world economic situation during 1980 and the first half of 1981 was difficult and disappointing in important respects. Nevertheless, signs of progress in dealing with some of the severe economic problems of recent years have begun to emerge. Both the encouraging aspects of the situation and the difficulties confronting national authorities, as well as the policies being utilized to meet those difficulties, are outlined in this report.
The current report finds that short-term risks to global financial stability have abated since April 2016, but that medium-term risks continue to build. Financial institutions in advanced economies face a number of cyclical and structural challenges and need to adapt to low growth and low interest rates, as well as to an evolving market and regulatory environment. Weak profitability could erode banks’ buffers over time and undermine their ability to support growth. A cyclical recovery will not resolve the problem of low profitability. More deep-rooted reforms and systemic management are needed, especially for European banks. The solvency of many life insurance companies and pension funds is threatened by a prolonged period of low interest rates. Corporate leverage in emerging market economies remains elevated in some countries, but the current favorable external environment presents an opportunity for overly indebted firms to restructure their balance sheets. The political climate is unsettled in many countries. A lack of income growth and a rise in inequality have opened the door for populist, inward-looking policies. These factors make it even harder to tackle legacy problems and further expose economies and markets to shocks. A potent and more balanced policy mix is needed to deliver a stronger path for growth and financial stability, and avoid slipping into a state of financial and economic stagnation. The report also examines how the rise of nonbank financing has altered the impact of monetary policy and finds that fears of a decline in the effectiveness of monetary policy are unfounded. It appears that the transmission of monetary policy is, if anything, stronger in economies with larger nonbank financial sectors. Finally, the report examines the link between corporate governance, investor protection, and financial stability in emerging market economies. It finds that the improvements over the past two decades have helped bolster the resilience of their financial systems. These benefits strengthen the case for further reform.
This 2011 Article IV Consultation highlights that the Gambian economy has performed well in recent years, despite a difficult global environment. The external current account deficit has widened in recent years, owing to weak tourism receipts and remittances and high global commodity prices. Executive Directors have commended the authorities for making progress in poverty reduction and achieving strong growth and low inflation despite a difficult global environment. Directors have welcomed the improved fiscal performance and supported the government’s plans for additional fiscal consolidation in the period ahead.
This technical note analyzes the existing legal and institutional frameworks in Australia, including coordination arrangements and focuses on crisis preparedness, including recovery and resolution planning as well as the Reserve Bank of Australia’s (RBA) lender-of-last resort functions. The analysis highlights that Australia has a well-established framework for financial stability, surveillance and policy formulation and the resolution regime for financial institutions has been significantly enhanced since the financial crisis. Australian Prudential Regulation Authority (APRA) has made progress in developing recovery planning requirements for the banking industry, extending these from large to medium sized and smaller banks. However, there is a need to better integrate the recovery planning within the risk management framework and operational testing exercises and to significantly enhance APRA’s work on resolution planning, particularly for the largest banks. The paper recommends that the Australian authorities should introduce an ex-ante funded deposit insurance scheme, based on best international practice.
Greece's integration into the euro area adds urgency to addressing the economic challenges. Securing stabilization gains within the Economic and Monetary Unit (EMU) will depend on labor cost developments, which need to restore an adequate level of competitiveness. Structural reforms, more equitable tax system, and public expenditure reform will be critical for securing stabilization gains. The high unemployment rate reduction will require comprehensive reforms targeted at the most affected labor market segments. An increasingly integrated and open market environment poses challenges for supervision and regulation.
Second Review Under the Three-Year Arrangement Under the Extended Credit Facility, Request for Waivers of Nonobservance of Performance Criteria, and Financing Assurances Review: Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Côte d'Ivoire
Second Review Under the Three-Year Arrangement Under the Extended Credit Facility, Request for Waivers of Nonobservance of Performance Criteria, and Financing Assurances Review: Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Côte d'Ivoire
Economic activity strengthened in Côte d’Ivoire in 2009, but it is expected to decelerate. Financial performance under the Extended Credit Facility-supported program was broadly satisfactory. Good progress was made in restructuring external debt. The program is in line with the agreed reform goals, but reflects the constraints imposed by the pre-election political situation. Tight expenditure management remains critical for the success of the program. Structural reforms are essential to strengthen growth. The risks to the program are high but manageable.
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