International Finance Corporation (IFC)
IFC publishes the Emerging Markets Database (EMDB). EMDB contains the latest figures for all IFC indices—global, investable, industry, and frontier—and on market data such as prices, corporate actions, and stock …
Links with the Basel Core Principle
The “efficient resolution of problems in banks” is mentioned in the Core Principles for Effective Banking Supervision (BCP) issued by the BCBS as one of the key preconditions for effective …
The Mapping of Macroscenarios to Balance Sheets: The Bottom-Up Approach
Translating a macroeconomic framework into the balance sheet of a financial institution requires mapping macrovariables into a set of common risk factors that can be applied to stress individual balance …
Maintenance of Competitive Conditions
Bank restructuring should not distort competition, subsidize failure, or penalize the more efficient banks in the system. This principle may be contained in competition law and enforced by the relevant …
Multitasking for the Sectoral Reviews
Having separate experts for sectoral stability and development analysis will overburden the country and impose excessive administrative costs. It will also result in a team that is too large to …
Institutional Structure of Financial Regulation and Supervision1
Overview Around the world, many countries are reconsidering the institutional structure of regulatory and supervisory agencies in the financial sector. This reconsideration reflects the concern that the existing structures—which were …
Regulation and Supervision of Private Funds
Private pension plans are schemes administered by an employer, a pension entity, or a private sector provider. They may either complement or substitute for social security systems and may include …
Commercial Databases Providing Aggregate Financial Sector Data
The CEIC Data Company Ltd. produces the CEIC Asia Database. This database provides, in addition to economic data, aggregate balance sheets by banking groups (e. g., all banks, commercial banks, …
Key Institutional Aspects of the Bank Insolvency Regime
A set of key features of the broader legal and institutional environment for bank regulation and contract enforcement will affect the effectiveness of any bank insolvency regime. Many of those …
Top-Down Approach
Conducting a “top-down” approach to stress testing provides a useful check on the results on the basis of individual balance-sheet information (the bottom-up approach). Furthermore, financial institutions in some countries …
Bank Restructuring and Cases with Actual or Potential Systemic Implications
Although legislation should require the authorities to observe the principles whenever they deal with an insolvent bank, the law should also provide flexibility to the banking authorities to handle exceptional …
Organization and Team Design for Stability Assessments
The issues are broadly similar to the case of development assessment discussed earlier. Exercising selectivity in the standards and sectors to be assessed in detail should be based on both …
Range of Fina ncial Supervisory Structures
A wide variety of institutional structures for financial supervision exists around the world. There is a spectrum of alternatives rather than an “either-or” choice, and there is considerable variety within …
Regulatory Oversight
The methods of pension regulation and supervision differ across countries, reflecting individual national standards and structures. For example, some OECD countries have established independent, separate pension fund supervisory agencies. Elsewhere, …
Commercial Databases Providing Bank-Level Data
Bankscope provides financial data (financial statements and bank performance indicators) for more than 10,000 individual banks. Bank-level data can be aggregated automatically, but the prudential indicators are sometimes available only …
General Issues in Bank Insolvency Proceedings
G.3.1 Choice of Bank Insolvency Regime The choice of legal arrangement should be conducive to achieving financial stability while also preserving the value of bank assets.4 A primary choice must …
Interpretation and Publication
Experience in conducting stress tests suggests they are a useful tool for identifying the latent risk exposures and the likely significance of losses in a systematic and intuitive manner. Stress …
Publicly Assisted Bank Restructuring
More recently, there has been broad international convergence on the principle that the discretionary, open-ended application of public funds to keep afloat insolvent banks and to make good their losses …
Follow-Up Issues—FSAP Updates, On-Going Surveillance, and TA
Although comprehensive FSAP assessments and reassessments can take place once in 8 to 9 years, additional tools are used to monitor the financial sector on a more continuous basis, to …
Importance of Institutional Structure
The institutional structure of supervisory agencies is not simply an administrative matter; it is important to meet the objectives of financial supervision for several reasons. Theobjectives of financial supervision are …
The Regulation of Investment Regimes7
The means by which investment regimes, and thus asset allocation, related to public and private pensions are regulated will vary across and within countries (e. g., each individual U. S. …
Countries covered: primarily countries with active capital markets Ratings Agencies
Moody’s Investors Services publishes financial statements and selected FSIs for the rated banks in each country in a banking statistical supplement. Each supplement contains 5 years of annual bank-level data. …
Administrative or Court-Based Special Bank Insolvency Regime
When a country seeks to address cases of bank insolvency through the corporate insolvency framework (with appropriate modifications), insolvency proceedings are invariably conducted in the courts. By contrast, the adoption …
Exchange Rate Risk
Exchange rate risk is the risk that exchange rate changes can affect the value of an institution’s assets and liabilities, as well as its off-balance-sheet items. Exchange rate risk can …
Main Restructuring Techniques and Basic Applicable Principles
The guidelines include the appropriate treatment of the legal issues involved in different bank restructuring techniques, such as mergers or acquisitions, good-bank and bad-bank separation, bridge banks, and purchase-and-assumptions transactions. …
Illustrative Data Questionnaires for Comprehensive Financial Sector Assessment
This appendix complements chapter 2 and provides some additional guidance on the sort of quantitative data that should be collected to facilitate the analysis of different aspects of financial stability …
Case for the Fully Unified Model
The fully unified model is particularly relevant when regulated entities are increasingly consolidating their activities and turning into conglomerates with centralized risk management. Several arguments might favor the creation of …
Government Guarantee Funds9
In several countries, government guarantee funds have been established to ensure DC private pension plans. The goal of such guarantees is to reduce an individual’s exposure to investment and other …
Stress Testing
This technical note is intended to answer some of the questions that may arise as part of the process of stress testing a financial system. The note is structured as …
Commencement of Bank Insolvency Proceedings
Banking authorities have an informational advantage and are, thus, better placed than creditors to assess a bank’s true situation and to detect insolvency at an early stage. It is, therefore, …
Interest Rate Risk
Duration is a key indicator for the measurement of the direct interest rate risk. The principal usefulness of duration stems from the fact that it approximates the elasticity of the …
Bank Liquidation
In liquidation, an insolvent bank is dissolved after a liquidator assumes legal control of its estate, collects and realizes its assets, and distributes the proceeds to creditors—in full or partial …
Indicators of Access to Financial Services
Financial institutions Number of branches, or other banking service outlets, for each bank, NBFI, and DFI and for each province (state and local jurisdictions) Number of ATMs for each bank, …
Case Against the Fully Unified Model
There is clear merit in the arguments stated in the case for a unified model, and there is a certain prima facie appeal to the concept of a unified prudential …
The Process
System-focused stress testing is best seen as a process: part investigative, part diagnostic, part numerical, and part interpretive. Ideally, this process begins with the identification of specific vulnerabilities or areas …
