Download or read book A Framework for Systemwide Liquidity Analysis written by Xiaodan Ding and published by International Monetary Fund. This book was released on 2024-05-17 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: We developed a novel Systemwide Liquidity (SWL) framework to identify liquidity stress in the system that goes beyond banks and to assess the role played by non-bank financial institutions (NBFIs) in episodes of liquidity stress. The framework, which complements standard liquidity and interconnectedness analyses, traces the flow of liquidity among various agents in the economy and explores possible transmission channels and amplification mechanisms of correlated liquidity shocks. The framework uses unique balance sheet and asset encumbrance data to demonstrate the importance of assessing liquidity at the system level by allowing for (i) analyses of each agent’s contribution to liquidity stress, (ii) analyses of the impact of different behavioral assumptions (e.g., pecking order of collateral utilization, negative externalities of fire-sales and margin positions), and (iii) policy simulations. Since this framework covers a comprehensive set of financial instruments and transactions, it paves the way for harmonization of systemwide liquidity analysis across countries. We applied this general framework to Mexico in the context of the FSAP. Results for Mexico show that commercial banks safeguard the resiliency of the financial system by backstopping the liquidity needs of other agents. Moreover, certain sectors appear more vulnerable when binding regulatory liquidity constraints trigger risk-averse behavioral responses.

Download or read book Systemwide Liquidity Stress Testing Tool written by Ms. Hiroko Oura and published by International Monetary Fund. This book was released on 2022-12-16 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Developing a systemic liquidity stress testing tool is challenging due to data constraints and hard-to-model behavioral factors. There has yet to be a uniformly accepted model partly because the nature of systemic liquidity risks differs significantly across countries. This paper offers a simple Excel-based tool to assess the high-level impact of aggregate liquidity stress on the whole economy and gauge its spillover across banks, non-bank financial institutions (NBFIs), and non-financial economic sectors. It primarily uses the balance sheet approach (BSA) data—a sector-aggregate matrix of financial exposure by counterpart—that have become increasingly available for various economies with all income levels. The results can identify systemically important financial linkages to be analyzed further and help calibrate macroprudential measures and a liquidity support framework. When liquidity stress stems from capital outflows, the tool can enrich policy discussion based on integrated policy framework (IPF) and international reserve adequacy perspectives.

Download or read book Next Generation System Wide Liquidity Stress Testing written by Mr.Claus Puhr and published by International Monetary Fund. This book was released on 2012-01-01 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: A framework to run system-wide, balance sheet data-based liquidity stress tests is presented. The liquidity framework includes three elements: (a) a module to simulate the impact of bank run scenarios; (b) a module to assess risks arising from maturity transformation and rollover risks, implemented either in a simplified manner or as a fully-fledged cash flow-based approach; and (c) a framework to link liquidity and solvency risks. The framework also allows the simulation of how banks cope with upcoming regulatory changes (Basel III), and accommodates differences in data availability. A case study shows the impact of a "Lehman" type event for stylized banks.

Download or read book Stress Testing at the IMF written by Mr.Tobias Adrian and published by International Monetary Fund. This book was released on 2020-02-05 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explains specifics of stress testing at the IMF. After a brief section on the evolution of stress tests at the IMF, the paper presents the key steps of an IMF staff stress test. They are followed by a discussion on how IMF staff uses stress tests results for policy advice. The paper concludes by identifying remaining challenges to make stress tests more useful for the monitoring of financial stability and an overview of IMF staff work program in that direction. Stress tests help assess the resilience of financial systems in IMF member countries and underpin policy advice to preserve or restore financial stability. This assessment and advice are mainly provided through the Financial Sector Assessment Program (FSAP). IMF staff also provide technical assistance in stress testing to many its member countries. An IMF macroprudential stress test is a methodology to assess financial vulnerabilities that can trigger systemic risk and the need of systemwide mitigating measures. The definition of systemic risk as used by the IMF is relevant to understanding the role of its stress tests as tools for financial surveillance and the IMF’s current work program. IMF stress tests primarily apply to depository intermediaries, and, systemically important banks.

Download or read book Managing Systemic Banking Crises written by Ms.Marina Moretti and published by International Monetary Fund. This book was released on 2020-02-11 with total page 88 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper updates the IMF’s work on general principles, strategies, and techniques from an operational perspective in preparing for and managing systemic banking crises in light of the experiences and challenges faced during and since the global financial crisis. It summarizes IMF advice concerning these areas from staff of the IMF Monetary and Capital Markets Department (MCM), drawing on Executive Board Papers, IMF staff publications, and country documents (including program documents and technical assistance reports). Unless stated otherwise, the guidance is generally applicable across the IMF membership.

Download or read book Usability of Bank Capital Buffers The Role of Market Expectations written by José Abad and published by International Monetary Fund. This book was released on 2022-01-28 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Following the COVID shock, supervisors encouraged banks to use capital buffers to support the recovery. However, banks have been reluctant to do so. Provided the market expects a bank to rebuild its buffers, any draw-down will open up a capital shortfall that will weigh on its share price. Therefore, a bank will only decide to use its buffers if the value creation from a larger loan book offsets the costs associated with a capital shortfall. Using market expectations, we calibrate a framework for assessing the usability of buffers. Our results suggest that the cases in which the use of buffers make economic sense are rare in practice.

Download or read book A Guide to IMF Stress Testing written by Ms.Li L Ong and published by International Monetary Fund. This book was released on 2014-12-23 with total page 610 pages. Available in PDF, EPUB and Kindle. Book excerpt: The IMF has had extensive involvement in the stress testing of financial systems in its member countries. This book presents the methods and models that have been developed by IMF staff over the years and that can be applied to the gamut of financial systems. An added resource for readers is the companion CD-Rom, which makes available the toolkit with some of the models presented in the book (also located at elibrary.imf.org/page/stress-test-toolkit).

Download or read book Financial Market Regulation and Reforms in Emerging Markets written by Masahiro Kawai and published by Brookings Institution Press. This book was released on 2011 with total page 441 pages. Available in PDF, EPUB and Kindle. Book excerpt: "In the wake of the global financial crisis that began in 2008, offers a systematic overview of recent developments in regulatory frameworks in advanced and emerging-market countries, outlining challenges to improving regulation, markets, and access in developing economies"--Provided by publisher.

Download or read book The Federal Reserve System Purposes and Functions written by Board of Governors of the Federal Reserve System and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Download or read book Dealing with the Challenges of Macro Financial Linkages in Emerging Markets written by Otaviano Canuto and published by World Bank Publications. This book was released on 2013-10-29 with total page 307 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book deals with the challenges of macro financial linkages in the emerging markets.

Download or read book Panama written by International Monetary Fund. Western Hemisphere Dept. and published by International Monetary Fund. This book was released on 2017-05-04 with total page 69 pages. Available in PDF, EPUB and Kindle. Book excerpt: The opening of the expanded Panama Canal marks a unique opportunity to reevaluate Panama’s growth model. This paper reassesses Panama’s business model founded on its ability to be an attractive destination for international financial, business, and transportation services. A growth diagnostic exercise suggests that Panama is well-placed to maintain this business model, with improvements in the quality of education, a strengthening of governance, and reductions in bureaucracy important to further strengthen Panama’s comparative advantage. Additional analysis suggests that investment will continue to support growth, while the logistics and tourism sectors hold promise to further build on Panama’s comparative advantage.

Download or read book The Net Stable Funding Ratio written by Jeanne Gobat and published by International Monetary Fund. This book was released on 2014-06-12 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: As part of Basel III reforms, the NSFR is a new prudential liquidity rule aimed at limiting excess maturity transformation risk in the banking sector and promoting funding stability. The revised package has been issued for public consultation with a plan of making the rule binding in 2018. This paper complements earlier quantitative impact studies by discussing the potential impact of introducing the NSFR based on empirical analysis of end-2012 financial data for over 2000 banks covering 128 countries. The calculations show that a sizeable percentage of the banks in most countries would meet the minimum NSFR prudential requirement at end-2012, and, further, that larger banks tend to be more vulnerable to the introduction of the NSFR. Additionally, by comparing the NSFR to other structural funding mismatch indicators, we find that the NSFR is a relatively consistent regulatory measure for capturing banks’ funding risk. Finally, the paper discusses key policy issues for consideration in implementing the NSFR.

Download or read book The Eurosystem s Monetary Policy at 25 1999 2023 written by Christos V. Gortsos and published by buch & netz. This book was released on 2024-06-28 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study, completed in April 2024, aims at comprehensively presenting and thoroughly analysing the legal framework governing the definition and implementation of the single monetary policy in the euro area during the first twenty-five years of the Eurosystem’s operation. In this historical context, the focus is on the legal aspects pertaining to the definition and implementation of this single monetary policy since the establishment of the Eurosystem on 1 January 1999 amidst, and in response to, several financial and non-financial crises which erupted in the course of that period (and in particular since 2007, which marked the onset of the Global Financial Crisis). The ultimate goal is to highlight the significant contribution and the importance of the legal framework in shaping the single monetary policy of the Eurosystem, in normal times and at times of stress. The study is structured in two key chapters entitled “The Single Monetary Policy in the Euro Area: Definition and Legal Framework” and “Implementation of the Single Monetary Policy in the Euro Area in Periods of Crises”. The Epilogue (Chapter 3), entitled “Considerations on the Impact of Monetary Policy Decisions on Financial Stability in the Euro Area” discusses the interaction between monetary policy and financial stability, as well as the latest (until April 2024) financial stability conditions in the euro area through the lens of international and EU official reports, taking also into account the (spring 2023) banking turmoil.

Download or read book The Global Financial Crisis written by Dick K. Nanto and published by DIANE Publishing. This book was released on 2009 with total page 127 pages. Available in PDF, EPUB and Kindle. Book excerpt: Contents: (1) Recent Developments and Analysis; (2) The Global Financial Crisis and U.S. Interests: Policy; Four Phases of the Global Financial Crisis; (3) New Challenges and Policy in Managing Financial Risk; (4) Origins, Contagion, and Risk; (5) Effects on Emerging Markets: Latin America; Russia and the Financial Crisis; (6) Effects on Europe and The European Response: The ¿European Framework for Action¿; The British Rescue Plan; Collapse of Iceland¿s Banking Sector; (7) Impact on Asia and the Asian Response: Asian Reserves and Their Impact; National Responses; (8) International Policy Issues: Bretton Woods II; G-20 Meetings; The International Monetary Fund; Changes in U.S. Reg¿s. and Regulatory Structure; (9) Legislation.

Download or read book Jordan written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2023-04-21 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: The banking sector dominates Jordan’s financial system, and its strength is essential to support macroeconomic stability and the peg to the U.S. dollar. The authorities have implemented measures to enhance the system’s resilience and oversight since the 2008–09 FSAP, allowing it to withstand large shocks (Global Financial Crisis, Arab Spring, war in Syria and influx of refugees, COVID-19). Global growth headwinds, high energy and food prices as well as sharply rising interest rates are pressuring nonfinancial sector balance sheets.

Download or read book Monetary and Exchange System Reforms in China written by Mr.Bernard Laurens and published by International Monetary Fund. This book was released on 1996-09-26 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 1978, China embarked on a gradual but far-reaching reform of its economic system. This paper focuses on the achievements so far in reforming the financial sector, the legal framework for financial transactions, the payments system, and the monetary policy and foreign exchange system. It also analyzes the tasks ahead to achieve the goals set in these areas for the year 2000.

Download or read book Philippines written by International Monetary and published by International Monetary Fund. This book was released on 2021-04-09 with total page 71 pages. Available in PDF, EPUB and Kindle. Book excerpt: GDP contracted by 91⁄2 percent in 2020—a much steeper decline than during the Asian Financial Crisis (AFC)—but it is now recovering with the easing of containment measures and economic policy support. Banks are closely connected to the corporate sector through high credit exposures and conglomerate ownership linkages. The Financial Action Task Force (FATF) may list the Philippines as a jurisdiction with serious Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) deficiencies in 2021. The country is also vulnerable to climate change (physical) risks, especially the destruction of physical capital from typhoons.