Aggregate Balance Sheet Structure of Financial and Non-financial Sectors—Inter-sectoral Linkages
Analysis of stock variables in countries’ sectoral balance sheets (assets and liabilities of financial firms, non-financial firms, households, government, and sub-sectors of those sectors, as appropriate) and the consolidated aggregate …
Near-banks
While some nearbanks, such as finance companies, can be seen as an annex to the commercial banking system, some smaller scale near-banks may have sufficient development importance to call for …
The Insurance Market Assessment
The ICPs can be properly assessed only in the context of an overall analysis of conditions in the insurance sector, including an assessment of the performance of and prospectsfor the …
Institutional Providers of Rural Finance and Microfinance Services
The distinction between microfinance and small and medium enterprise (SME) finance and the recognition of the different types of financial institutions catering to thosesegments are important to the assessment of …
Capital Markets
Laws to establish a securities markets and stock exchanges play a key role in facilitating the providing of financing for domestic investment. Misuse of securities markets has resulted in the …
Disclosure Regime for Financial Institutions
The evolving regulatory practices for banks and other financial institutions, in particular the New Basel Capital accord, places a strong emphasis on harnessing market forces,through adequate disclosure and enhanced transparency …
Analysis of Macrofinancial Linkages
Macrofinancial linkages focus on macroeconomic and sectoral implications of financial instability, and they derive from the many ways in which different nonfinancial sectors rely on intermediation by the financial sector …
Evaluating Financial Sector Supervision: Banking, Insurance, and Securities Markets
This chapter looks at the legal, institutional, and policy framework needed to ensure effectiveness of financial sector supervision. It focuses on banking, insurance, and securities markets. Effective supervision, however, depends …
Enforcement and the Exchange of Information
Enforcement plays a central part in the operation of well-run capital markets. It is essential for a securities regulator to be diligent in administering the laws and rules and to …
Ways to Address Rural Finance and Microfinance Regulatory Framework Issues
The core issues in the legal and regulatory framework for rural finance and microfinance will differ from one country to another because of country differences in the structure
Accounting and Auditing Assessments
An assessment of accounting and auditing standards is a key part of the evaluation of robustness of a country’s financial market infrastructure (the third pillar of the Financial Sector Assessment) …
Securities Settlement Systems
The term securities settlement systems is defined to include the full set of institutional arrangement for confirmation, clearance, and settlement of securities trades and safekeeping of securities. 11.1.2.1 Recommendations for …
Indicators of Financial Structure, Development, and Soundness
This chapter presents an overview of quantitative indicators of financial structure, development, and soundness. It provides guidance on key system-wide and sectoral indicators, including definitions, measurement, and usage. Key data …
Stability and Development: Complementarities Despite the Different Perspective
Financial structure analysis and development assessment inevitably overlaps extensively with the stability assessment. Even if adequate from a stability perspective, the existing regulatory framework and the supervisory practices may need …
Assessment Experience
A review of FSAP experience with BCP assessments reveals areas of strengths and weaknesses (see table 5.1). Notwithstanding better overall performance of industrialized Table 5.1. Observance of Basel Core Principles …
Assessing the Supervision of Other Financial Intermediaries
6.1 Overview This chapter focuses on issues in the regulation of a range of non-bank financial institutions (NBFIs), categorized as Other Financial Intermediaries (OFIs). OFIs refer to those financial corporations …
Annex 8.A FATF 40+8 Recommendations for AML-CFT
Forty Recommendations Legal Systems (in line with UN conventions) 1. Legal systems should specify a broad scope of money-laundering offenses by criminalizing money laundering related to all serious offenses and …
Consumer Outreach and Education
The role of credit reports is often misunderstood by consumers; thus, appropriate transparency and outreach should be used to foster consumer education. People seldom think about or review their credit …
Operational Procedures for FSAP, FSAP Updates, Follow-Up
Technical Assistance, and Relationship to Bank-Fund Operations [27] Country Cooperating official institution Argentina Central Bank of the Republic of Argentina Australia Reserve Bank of Australia Australian Prudential Regulation Authority Australian …
Assessing Financial Stability
Financial system stability in a broad sense means both the avoidance of financial institutions failing in large numbers and the avoidance of serious disruptions to the intermediation functions of the …
Insurance and Collective Investment Arrangements
As with the banking sector, insurance and collective savings generate financial services on both the asset and the liability side. On the liability side, they provide investment outlets and risk-reduction …
Flexibility
Another feature of the assessment process is that “the framework described by the Insurance Core Principles is general. Supervisors have flexibility in adapting it to the domestic context” (IAIS 2003a, …
Government Rural Finance, Microfinance, or SME Finance Programs or Agencies
The direct provision of rural finance, microfinance, and SME finance loans and credit facilities by government agencies or programs should be noted and examined in the assessment of adequacy of …
Insurance
Insurance needs to be regulated by law and regulations that support the development of the sector and that provide adequate protection to policyholders while containing claims for insurance fraud. The …
Current Practices and Evolving Standards
Public disclosure practices of banks are typically governed by banking laws in some countries and by the listing requirements for publicly traded companies under the countries’ securities regulations and the …
Effect of Financial Soundness on Macroeconomic Developments
A key macrofinancial linkage that is important in almost all countries derives from the dependence of nonfinancial sectors on financing provided by banks.18 The potential effect on macroeconomic conditions of …
Legal and Institutional Framework for Financial Supervision
The legal framework empowering and governing the regulator and the rules used to regulate the various markets and institutional types form the cornerstone of the orderly functioning and development of …
A Legal and Institutional Environment for Effective Bank Insolvency Procedures
Autonomy of Banking Authority The basic framework for bank insolvency needs to (a) be set out in the law that states the goals to be pursued by the banking authorities …
Consensus Guidelines on Regulating and Supervising Microfinance [12] [13]
• Design of microfinance regulation should not proceed very far without estimating supervision costs realistically and identifying a sustainable mechanism to pay for them. Donors who encourage governments to take …
Role of the Accounting and Auditing Framework: Relevance to Development and Stability
Accounting and auditing standards of high quality provide the basis for reliable and transparent disclosure of information to relevant stakeholders. Disclosure is crucial for informed financial decisions, efficient resource allocation, …
Monetary and Foreign Exchange Operations—Instruments and Effectiveness
The prevailing monetary operations framework is based on monetary policy instruments and operating procedures, money and foreign exchange markets, and payment settlement system. Its design bears directly on banks’ ability …
System-wide Indicators
Financial structure is defined in terms of the aggregate size of the financial sector, its sectoral composition, and a range of attributes of individual sectors that determine their effectiveness in …
Quantitative Benchmarking
If we are to obtain an overall picture of where the financial sector is, or is not, performing well, then the performance of financial intermediaries and markets—in terms of total …
Basel II
The 1988 Capital Accord (Basel I) introduced capital adequacy measures for credit risk that were based on risk weights assigned to different classes of bank exposures. It was originally intended …
Objectives of the Legal and Regulatory Framework for OFIs2
Against this background, the assessment of the regulation and supervision of OFIs should not only account for their effectiveness in meeting the traditional objectives of financial supervision, but should also …
