Featured Product

    IMF Published Working Paper on Financial Stability Analysis

    July 10, 2017

    IMF published a working paper that identifies common international threads in the data needed for financial stability analysis and suggests ways to address these. The paper discusses how financial stability is analyzed, identifies the datasets typically used in financial stability analysis, addresses the data gaps that have emerged, and sets out proposals for how economic and financial statistical manuals can better meet the financial stability data needs, without undermining the conceptual framework.

    The paper discusses the governance arrangements that have emerged for financial stability assessment. This includes tools such as broad-based capital tools (for example, dynamic provisioning, countercyclical capital buffers, and time-varying leverage ratio caps); sectoral capital and asset-side tools (for example, foreign currency loans to corporates, caps on loan-to-value, debt-service-to-income, and loan-to-income ratios); and liquidity-related tools (such as the liquidity coverage ratio); and the tools to contain maturity mismatch (such as core funding ratios) and price-based tools (such as a levy on volatile funding). Other policy tools include capital surcharges for global and domestic systemically important institutions and increases in risk-weights and large exposure or concentration limits. The report also highlights that stress tests have increasingly become integral to financial stability analysis as a method of testing the resilience of the financial sector. There remains room for improvement to use stress testing as a tool for macro-prudential risk assessment going beyond its traditional use for micro-prudential supervision.

     

    The report also highlights that policies have been developed to address potential financial stability risks arising from non-bank activities, such as central clearing of over-the-counter derivatives, and from market infrastructure, such as ensuring the resilience of central counterparties (for example, margining requirements and liquidity resources). However, the policy applications of financial stability analysis and the tools used to meet financial stability needs are still developing. The paper concludes that more work is required to meet financial stability analysis data needs, not least in implementing the initiatives underway. This includes data on shadow banking, capital flows, and corporate borrowing, as well as the increased demand for granular data. The paper notes that, while the specific datasets used can differ across country and over time, common patterns of data use emerge. 

     

    Related Link: Working Paper on Financial Stability Analysis (PDF)

    Keywords: International, Banking, Securities, Insurance, Financial Stability Analysis, IMF

    Related Articles
    News

    SEC Adopts Rules and Amendments Under Regulatory Regime for Swaps

    SEC announced that it took a significant step toward establishing the regulatory regime for security-based swap dealers (SBSDs) by adopting a package of rules and rule amendments under Title VII of the Dodd-Frank Act.

    September 19, 2019 WebPage Regulatory News
    News

    APRA Revises Standard on Margin Rules for Uncleared Derivatives

    APRA revised CPS 226, which is the prudential standard on margin and risk mitigation requirements for non-centrally cleared derivatives.

    September 19, 2019 WebPage Regulatory News
    News

    BIS Formalizes Agreement to Set Up Innovation Hub in Hong Kong SAR

    BIS and HKMA signed the Operational Agreement on the BIS Innovation Hub Center in Hong Kong Special Administrative Region (SAR).

    September 18, 2019 WebPage Regulatory News
    News

    PRA Proposal on Probability of Default and LGD Estimation

    PRA proposed, via the consultation paper CP21/19, an approach to implementing EBA’s recent regulatory products relating to Probability of Default (PD) estimation, Loss Given Default (LGD) estimation, and the treatment of defaulted exposures in the internal ratings-based (IRB) approach to credit risk.

    September 18, 2019 WebPage Regulatory News
    News

    PRA Issues Consultation on Prudent Person Principle Under Solvency II

    PRA, via the consultation paper CP22/19, has set out its proposed expectations for investment by firms, in accordance with the Prudent Person Principle (PPP).

    September 18, 2019 WebPage Regulatory News
    News

    CFTC Extends Comment Period for Proposals on Cross-Border Clearing

    CFTC announced that it is extending, until November 18, 2019, the comment period for the proposal for an alternative compliance framework for derivatives clearing organizations (DCOs) that are organized outside of U.S. and that do not pose substantial risk to the U.S. financial system.

    September 18, 2019 WebPage Regulatory News
    News

    BNM Publishes Financial Stability Review for the First Half of 2019

    BNM published Financial Stability Review for the first half of 2019.

    September 18, 2019 WebPage Regulatory News
    News

    APRA Observations from Thematic Review on Recovery Plans of Insurers

    APRA issued a letter to general insurers and life insurers, outlining observations from a recent thematic review on recovery planning by insurers.

    September 18, 2019 WebPage Regulatory News
    News

    FASB Issues Summary of Tentative Board Decisions at September Meeting

    FASB published a summary of the tentative decisions taken at its Board meeting in September 2019.

    September 18, 2019 WebPage Regulatory News
    News

    EIOPA Forms Consultative Expert Group on Digital Ethics in Insurance

    EIOPA established the Consultative Expert Group on Digital Ethics in Insurance to assist EIOPA in the development of digital responsibility principles in insurance.

    September 17, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3848