Rural and Microfinance Institutions: Regulatory and Supervisory Issues
7.1 Overview The providing of financial services to the poor and the very-poor, particularly in rural areas, is the purpose of microfinance institutions (MFIs), and the assessment of the regulatory …
Payment Systems
Efficient payment systems are critical to the effective functioning of a financial system. Robust payment systems that are resistant to systemic and credit risk are an essential requirement for maintaining …
World Bank ROSC Corporate Governance Assessments
As part of the ROSC initiative, the World Bank has established a program to assist its member countries in strengthening their corporate governance frameworks. The objectives of this program are …
Analysis of FSIs for Nonfinancial Sectors
Monitoring the financial condition and vulnerabilities of the corporate, household, and real estate sectors can enhance the capacity to assess risks to the financial sector. Loans to the corporate sector …
Development Obstacles Imposed by Unwarranted Prudential Regulation
Supervision and regulation have important implications for the effectiveness of intermediation and access to financial services, in addition to their roles in fostering stability. Entry regulation and uneven supervisory practices …
Special Topics in Securities Market Development and Regulation
Three key topics in securities market regulation and development are discussed in this section: (a) demutualization of stock exchanges, (b) creation of integrated regulator or supervisor, and (c) enforcement and …
Assessment of the Regulatory Framework Issues for Rural Finance and Microfinance Institutions
The assessment of the regulatory framework for the rural finance and microfinance sector covers both the institutional aspects and the benchmarks used to evaluate the sector’s performance and soundness. The …
Assessing Information and Governance Infrastructure
Information and governance infrastructure for finance provides the foundation for financial development and effective market discipline, and it helps to reinforce official supervision. It refers (a) to the legal and …
The CPSS Core Principles
The CPSS has defined 10 core principles and 4 central bank responsibilities with respect to payment systems. The core principles are intended to apply to a wide range of circumstances …
Overall Analytical and Assessment Framework — Executive Summary
This section provides the overall analytical framework for financial sector assessments, motivates the structure of the Handbook in terms of this framework, explains how the subsequent chapters fit into the …
Assessing Financial Structure and Financial Development
4.1 Overview 4.1.1 Motivation for Assessing Financial Structure and Financial Development Extensive evidence confirms that creating the conditions for a deep and efficient financial system can contribute robustly to sustained …
Assessment Methodology and Assessment Experience
BCP assessments are a form of peer review that helps to (a) identify regulatory strengths, risks, and vulnerabilities; (b) assess the level of observance of financial sector standards; (c) ascertain …
Annex 5.E IOSCO Methodology—Scope and Use of Principle 8
The IOSCO methodology document (IOSCO 2003a) introduces the group of principles relating to enforcement (Principles 8 through 10) with a preamble that defines the term enforcement and explains each of …
Assessing Preventive Measures: The Example of Customer Due Diligence
FATF Recommendation 5 calls for financial institutions to undertake customer identification measures in a variety of circumstances: when establishing business relations, when carrying out certain occasional transactions, when there is …
Credit-Reporting Institutional Arrangements
Institutional forms for credit-reporting arrangements around the world include both public credit registries administered by central banks and private credit-reporting firms of varied ownership structure. A survey conducted by the …
Principles of Sequencing
Risks in developing the specific types of markets, the hierarchy of markets, the demands that markets place on risk management and information requirements, and the various considerations discussed in sections …
FSIs for Securities Markets
The stability of securities markets can be monitored using a range of quantitative indicators that focus on market liquidity because of the important role that liquid securities play Table 2.5. …
Competition and Market Segmentation
Market structure can be measured using concentration ratios (assets of largest three or five banks to total banking assets), number of banks, and Herfindahl indices. One has to be careful, …
Usefulness of a Well-Prepared Self-Assessment
The authorities should prepare a self-assessment to benefit fully from an independent assessment of observance of ICPs. Self-assessment also helps the authorities to identify the relevant parts of the law …
Rationale for Assessing the Regulatory Framework for Rural Finance and Microfinance Institutions
The core objectives for the regulatory framework are the same for microfinance activities and institutions as for other components and segments of the overall financial system. However, the key principles …
Government Debt Management
Government securities usually play an important role in both developed and developing country economies, and the management of those security markets can be crucial for ensuring a robust and stable …
Key Findings from Country Assessments
The work of Fremont and Capaul (2002) reviews the lessons of corporate governance assessments and its findings are discussed in this section. None of the assessed countries comply with the …
System-Focused Stress Testing
Stress testing, in the context of financial sector surveillance, refers to a range of techniques to help assess the vulnerability of a financial system to exceptional but plausible events.17 It …
From Finding Facts to Creating Policies
Once the data gathering and analysis have been conducted (as outlined in sections 4.2 through 4.6), policies and reforms must be identified and prioritized. The task of policy formulation consists …
Creation of an Integrated Regulator or Supervisor—Security Regulator’s Perspective
During the past decade, a number of securities regulators in both developed and emerging markets have been merged into or reorganized as an integrated regulator or supervisor.39 That is, the …
. Some Cross-Cutting Issues Affecting Rural Finance and Microfinance Institutions
Tax issues may present obstacles to rural finance and microfinance institutions from more effectively providing access to financial services. The legal and nonprofit status of nonbank NGO MFIs may sometimes …
Monetary and Financial Policy Transparency
Good transparency practices for central banks and financial agencies in their conduct of monetary and financial policies can contribute policy effectiveness, policy consistency and good governance. The scope of good …
The Assessment Methodology and Assessment Experience
A CPSS assessment of core principles seeks to identify the strengths and weaknesses of the SIPS, including its potential to transmit shocks (also originating in other countries), as well as …
Annex 1.A Tailoring Financial Sector Assessment to Country Needs
Countries with less-developed financial systems may need more attention with respect to medium-term development issues such as institution building and financial market development. Coverage of the financial sector in those …
Scope of Analysis
The goals of financial structure analysis and development assessment for a country are to (a) assess the current provision of financial services, (b) analyze the factors behind missing or underdeveloped …
Key Considerations in Conducting an Assessment
Consistency to the extent possible, fairness, and objectivity are key, but the primary objective of the assessment remains, not to compare a country’s performance with others, but to identify and …
Annex 5.F Enforcement and the Exchange of Information
Securities regulators have a range of enforcement powers. According to the IOSCO core principles and the methodology, securities regulators must, in addition to their inspection and surveillance powers, be able …
Financial Intelligence Units
Financial Intelligence Units (FIU) constitute a key element in policies to counter financial crime and money laundering. FIU is a national agency that receives, analyzes, and disseminates to competent authorities …
Legal and Regulatory Framework for Credit Reporting
The legal and regulatory framework for credit reporting is usually governed by several laws and regulations and varies greatly around the world. Those laws include the following: • Regulations concerning …
Financial Sector Assessment Program—Objectives, Procedures, and Overall Framework
A.1 History and Objectives [25] [26] to avoid duplication of efforts, and to promote consistency of advice on financial sector issues through an integrated analysis of both development and stability …
