Analysis of FSIs for Insurance
Insurance is an important and growing part of the financial sector in virtually all developed and in many emerging economies; consequently, insurance sector soundness is important.10 Insurers help to allocate …
Taxation Issues
Tax policies are critical to the sound development of most segments of finance, yet taxation is a highly complex and country-specific matter within which the issues relating tothe financial sector …
IOSCO Core Principles—Relevance to Stability Considerations and Structural Development
The Objectives and Principles of Securities Regulation (the IOSCO core principles) of the International Organization of Securities Commissions is the key global standard for securities market regulation. The IOSCO bylaws …
Commercial Banks
Commercial banks may have direct participation in low-income markets as a result of their complying with directed or credit quota policies of government for targeted sectors. Sometimes, banks have indirect …
Access to Credit and Land Rights
Land law constitutes an important factor for sustainable development and private sector growth. It creates property rights systems for individuals, businesses, and the state, which, in turn, will create incentives …
Payment and Securities Settlement Systems
The role and types of payment systems and securities settlement systems, key principles and practices to govern the sound operations of these systems, and the methodology for assessing the observance …
Financial Sector Assessment
The experience of many countries around the world clearly shows that while financial sector development can spur economic growth, financial fragility and instability can seriously harm growth. Following the financial …
Islamic Banking—Stability Issues
The provision and use of financial services and products that conform to Islamic religious principles pose special challenges for a stability assessment. Institutions offering Islamic Financial Services (IIFS) and Islamic …
Assessment of Banking Supervision
This section presents the core principles that form the basis for assessing the effectiveness of banking supervision, explains the assessment methodology, outlines the recent assessment experience, and discusses selected key …
Annex 5.C IAIS Insurance Core Principles
The IAIS Insurance Core Principles comprise 28 principles that need to be in place for a regulatory and supervisory system to be effective (IAIS 2003a). The principles relate to the …
AML-CFT Assessment Methodology
Starting in 2002 and as agreed, AML-CFT assessments can be conducted using one of two approaches: either (a) Fund-Bank assessments or (b) FATF or FATF-style regional body (FSRB) mutual evaluations. …
Introduction to Credit-Reporting Systems
Credit or consumer reporting firms and other types of public credit information registries provide rapid access to accurate and reliable standardized information on credit history and financial condition of potential …
Development with Stability: The Role of Sequencing2
Long-term economic growth hinges on sound financial institutions and deep financial markets to mobilize savings and allocate resources. The liberalization of financial institutions, markets, and cross-border capital flows that are …
FSIs for Banking
Banking sector FSIs can provide useful quantitative information on the stability or vulnerability of the banking system.16 Banking sector FSIs can be grouped according to six key areas of potential …
Banking
The sectoral assessment for banking is at the heart of development issues in finance because of the central role of banking in the financial systems of most developing countries. In …
Relevance to Stability and Development
Sound and effective regulation and supervision is important in sustaining a sound operating sector that protects and maintains the confidence of policyholders and, therefore, plays an effective role in overall …
Annex 6.A Regulation and Supervision of OFIs: A Few Guiding Principles
As one puts in place a regulatory framework for Other Financial Intermediaries (OFIs), some regulations common in traditional banking must be adjusted to accommodate those institutions. The challenges facing a …
Banking Law
The banking law typically provides for the formation and operation of banks and, sometimes, nonbank financial institutions. The law should deal with the requirements for the opening of a bank; …
OECD Principles of Corporate Governance
In response to a call by the OECD council meeting at the ministerial level on April 27-28, 1998, to develop a set of corporate governance standards and guidelines, the OECD …
Analysis of FSIs for Securities Markets12
Securities markets are a major component of the financial sector in many countries. The capitalization of equity and bond markets in many industrialized countries, with savings in securities investments now …
Competition Aspects
Effective competition can provide the incentives to expand financial services. Both prudential and competition policies (including licensing and entry, exit and merger policies, and branching and similar regulations) should facilitate …
Preconditions for Effective Securities Market Regulation
Effective securities regulation depends on the existence of a number of “preconditions.” The IOSCO core principles recognize that “securities law and regulation cannot exist in isolation from the other laws …
Conceptual Framework for the Regulation of Rural Finance and Microfinance Institutions
The aim of a supportive regulatory framework is to build strong regulated and unregulated institutions of all types (a) to provide services on a sustainable basis under uniform, common, shared …
The Judicial System
It is widely accepted that economic growth and social development cannot be sustained and promoted in countries where the justice system fails. By consistently enforcing clear rules, an independent and …
Relevance to Structural Development and Stability Considerations
The availability of an effective set of non-cash payment instruments and a well-designed payment system are essential for the development of the economy. Non-cash payment instruments can enhance the efficiency …
Financial Sector Assessments: Overall Framework and Executive Summary
1.1. Introduction The design of policies to foster financial system stability and development has become a key area of focus among policy makers globally. This policy focus reflects the growing …
Key Policy Issues and Policy Priorities to Support Stability
The previous sections of this chapter (3.1—3.5) have described a range of qualitative and quantitative information and techniques that can be used to identify potential strengths • Another specific risk …
Preconditions for Effective Banking Supervision
The BCPs include five preconditions for effective supervision. Although preconditions are not formally part of the BCPs because they are normally beyond the jurisdiction of bank supervisors, “weaknesses or shortcomings …
Annex 5.D List of IOSCO Objectives and Principles of Securities Regulation
The three core objectives of securities regulation are (a) protecting investors; (b) ensuring that markets are fair, efficient, and transparent; and (c) reducing systemic risk. Principles Relating to the Regulator …
Special Topics in AML-CFT Assessments
While AML-CFT assessments cover a wide range of issues, certain institutional arrangements play a critical role in the effectiveness of the overall AML-CFT regime and,hence, are analyzed closely in most …
Elements of a Robust Credit-Reporting System
Good practices of a robust credit-reporting system are presented in this section to provide broad guidance on issues to consider in establishing a new credit-reporting system and in identifying areas …
Strengthening Access to Foreign Capital
Effective strategies to enhance access to private foreign capital can provide a significant boost to economic growth and poverty reduction, but the benefits of such access can be realized only …
FSIs for Insurance
Quantitative soundness indicators for the insurance sector can be presented within a CARAMELS (Capital adequacy, Asset quality, Reinsurance, Adequacy of claims and actuarial, Management soundness, Earnings and profitability, Liquidity, and …
Scope of Activities
If one is to understand the role of the banking system in contributing to the functions of finance in the country being assessed, it is necessary to clarify what are …
The Structure of the ICPs
The ICPs consist of 28 principles in total, grouped into seven categories.21 The principles cover all aspects of a supervisory framework—from licensing to closure of activities. The seven groupings reflect …
