Post on 02-Jan-2016
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Robert W. EdwardsDirectorStatistics DepartmentInternational Monetary Fund
OECD World Forum on Statistics, Knowledge, and PolicyIstanbul, June 27-30, 2007
Policy and Statistical Issues Underpinning Financial Stability: The IMF Perspective
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Financial Stability in Global World
Unprecedented deepening in financial markets
Internationalization of financial institutions
National economies part of vast network of closely interconnected balance sheets, with potential for severe spillover effects
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Financial Stability Implications For individual institutions, globalization
helps diversify risks and may have improved financial stability, particularly in face of relatively small shocks
At the systemic level, severe crises may be more broad-ranging and difficult to deal with due to spillovers Financial instability in one country may
be transmitted to other countries or affect developments in regional or global markets
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Containing Potential Risks Need to reduce likelihood of systemic crises
and limit their severity if they occur: Effective monetary policy
Sound fiscal stance
Deep, broad, and resilient financial systems Coordinated oversight of cross-border financial
institutions
Cross-border crisis management and resolution arrangements
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Role of the IMF Through universal reach and expertise on
macroeconomic and financial issues and on statistics: Enhance monitoring of global economy
Help individual countries strengthen resilience of their economies
Help provide timely, comprehensive, and internationally comparable data
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New Directions in Financial Surveillance
No single widely-accepted methodology for assessing financial sector stability
Two key questions: What are key interactions between macro-
economy, financial markets, and financial institutions?
What is role of financial sector in initiating, transmitting, or amplifying disturbances in the economy?
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IMF Financial Surveillance Framework Continued emphasis on the Financial Sector
Assessment Program (FSAP) Designed to assess stability of system as a whole 120 initial assessments and 27 updates (June 2007)
Greater financial coverage in Article IV consultations Ensuring continuity between FSAP assessments Integrating financial analysis into traditional macro-
economic analysis.
More global perspective Integrating multilateral and regional issues Regional FSAPs
FSAP Participation (as of May 2007)
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Analytical Tools Use of indicators in surveillance
Financial Soundness Indicators (FSIs) of banks and their clients are a key tool of surveillance
Forward-looking tools such as stress tests and market-based indicators support analysis of FSIs
The Balance Sheet Approach (BSA) Based on stocks of assets and liabilities of economic
sectors
Examine determinants and evolution of these stocks and how they can trigger flow adjustments (capital inflows, holdings of foreign currency assets)
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Statistical Initiatives Collecting and presenting high quality
statistical data to support analytical work needed for surveillance: Intensification of cross-border financial flows and
positions with spillover effects
Lack of good-quality cross-country comparable financial soundness indicators
Balance sheet nature of major recent crises
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Cross-Border Financial Flow Data
External Sector Data International Investment Position (IIP)
Coordinated Portfolio Investment Survey (CPIS)
Coordinated Direct Investment Survey (CDIS) (planned)
Data Template on International Reserves and Foreign Currency Liquidity (Reserve Template)
Currency Composition of Official Foreign Exchange Reserves (COFER)
Joint External Debt Hub (JEDH)
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Financial Soundness Indicators
To encourage compilation of internationally comparable FSIs: Compilation Guide: Financial Soundness
Indicators (12 core and 27 encouraged FSIs)
Coordinated Compilation Exercise 62 participating countries
End-2005 FSI data and metadata posted on IMF website for 57 countries
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Meeting data needs of BSA Intensive data framework requiring stock
data, currency denomination, and maturities of sectoral assets and liabilities Standardized Report Forms (SRFs) introduced in
2005
SRF data provide most of the information needed for BSA
About 80 countries report SRF data to IMF
Other data sources: CPIS, IIP, and JEDH
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Much Work Remains to be Done Policy and analytical front
Provide key insights about financial risks and vulnerabilities
More attention to macro-linkages Better use of available data Strengthen focus on spillovers and cross-country links
Statistical front Wider production and reporting of timely data to shed
light on global financial flows Greater coverage of data essential for BSA Regular collection of FSIs and expansion of indicators
to include FSIs for non-banks