Featured Product

    IMF Paper Examines Macro-Prudential Policy Frameworks Worldwide

    September 11, 2018

    IMF published a working paper on a study looking for robust and implementable framework for macro-prudential stress tests and policies. This report summarizes the findings of a joint research effort by Monetary and Capital Markets Department and the Systemic Risk Center.

    The report presents state-of-the-art approaches on macro-prudential stress testing, including modeling and implementation challenges. It also provides a roadmap for future research and discusses the potential uses of macro-prudential stress testing to support policy. A table at the end of the report lists and summarizes the macro-prudential tools in use being used in various countries (refer to Table 1). Another table examines the design of stress testing frameworks of EU, IMF, UK, United States, Canada, Singapore, Bank of Japan, Bank of Korea, and Norges Bank (refer to Table 2).

    Macro-prudential stress tests can offer quantitative, forward-looking assessments of the resilience of financial systems as a whole, to particularly adverse shocks. Therefore, they are well-suited to support the surveillance of macro-financial vulnerabilities and to inform the use of macro-prudential policy instruments. The report argues that it would be useful for authorities to adopt a structured yet flexible approach to stress testing for macro-prudential purposes. Such an approach can employ a number of separate models as part of the analysis. The report also concludes that there needs to be accountability for those in charge of formulating macro-prudential policy to the broader policymaking authorities. Also, there needs to be a clear policy on the delicate issue of transparency of stress testing results. There are costs and benefits of communicating stress test results and this involves weighing possible effects on operations of individual institutions versus the system, perception of risks at different times of the cycle, and consequences for risk-sharing within the system.

     

    Related Link: Report

    Keywords: International, Banking, Macro-prudential Policy, Stress Testing, Systemic Risk, IMF

    Featured Experts
    Related Articles
    News

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News
    News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News
    News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory News
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    News

    BIS Bulletin Examines Cognitive Limits of Large Language Models

    The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.

    January 25, 2024 WebPage Regulatory News
    News

    ECB is Conducting First Cyber Risk Stress Test for Banks

    As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

    January 24, 2024 WebPage Regulatory News
    News

    EBA Continues Momentum Toward Strengthening Prudential Rules for Banks

    A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.

    January 24, 2024 WebPage Regulatory News
    News

    EU and UK Agencies Issue Updates on Final Basel III Rules

    The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards

    December 19, 2023 WebPage Regulatory News
    News

    Industry Agency Expects Considerable Uptake for Swiss Climate Scores

    The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.

    December 18, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8952