Financial Sector Assessment Program: an Update

Transcription

1 Financial Sector Assessment Program: an Update Presented by Mario Guadamillas and Christine Sampic Global Payments Week Amsterdam, October 18-22, 2010

2 Outline FSAP is changing Standards & Codes (ROSCs) FSB and ROSCs Bank/Fund Standards & Codes Initiative Review Payments and Securities Settlement Systems (SSS) assessments data Post-crisis payment and settlement systems Payments and SSS Standards' revision Impact on FSAP 2

3 FSAP Country Participation 3

4 Preserve and capitalize on the successes and wide acceptance of the Program Flexibility through modules (stability, development) focused and responsive to country circumstances Enhanced analytical tools for more comprehensive, consistent diagnostics Integrating assessments better with IMF surveillance and World Bank operations 4

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6 Changes approved in the context of the Fund review of its surveillance function Mandatory FSAP stability modules every 5 years for 25 countries with systemically important financial sectors, focused on: Source, probability, and potential impact of the main risks to macro-financial stability in the near-term Country s financial stability policy framework Authorities capacity to manage and resolve a financial crisis should the risks materialize 6

7 Standards and Codes (ROSCs) FSB Key Standards Financial Regulation and Supervision Macroeconomic Policy and Data Transparency Institutional and Market Infrastructure Banking (BCP) * Insurance (IAIS)* Securities (IOSCO)* Being used by the FSB framework for adherence to cooperation and information exchange on prudential regulation and supervision * Assessed in the context of FSAP Monetary and Financial Policy Transparency* Fiscal Policy Transparency Data Dissemination ** Stand alone ROSC program coordinated with the FSAP Payments and Settlement (CPSS, CPSS-IOSCO)* AML/CFT (FATF)** Corporate Governance (OECD)** Accounting (IASB) and Auditing (IFA)** Insolvency & Creditor Rights (Bank/UN)** 7

8 Framework for strengthening adherence to international standards on international cooperation and information exchange (BCP, IAIS, IOSCO) FSB Working Group on Compendium of Standards: Review of the list of 12 key Standards Update list of standards in the Compendium Summarise work in progress (or planned) to update existing standards or develop new ones; Propose changes to the structure and dissemination of the Compendium to improve its visibility and usefulness 8

9 S&C Initiative launched in 1999 Strengthen members countries economic institutions Inform Bank and Fund operational work Inform market participants Objectives of the current review Strengthen Effectiveness of the Initiative in light of its original objectives Potential need to adapt the Initiative in light of standards review by standards setters Proposals: list key standards, prioritization, Bank and Fund follow-up, strengthening communication 9

10 Relative Usefulness of ROSCs 1/ (average rank from 1 = least useful to 5 = most useful) 10

11 Payments Assessment data Between 1999 and 2009, 124 SIPS were assessed against the CPSIPS in 84 countries during FSAP and FSAP update missions. 40% of involved countries were in Europe, 20% in the Western Hemisphere, and between 15 and 10% in each of the 3 other regions: Asia and Pacific, Middle East and Central Asia, and Africa

12 SSS Assessment data Between 2000 and 2009, 38 SSS were assessed against the RSSS in 22 countries during FSAP and FSAP update missions. Most of involved countries were in Europe, with only 3 countries of the Western Hemisphere, and 5 from the Asia and Pacific regions

13 Post-crisis payment and settlement systems Focus on Financial Stability Payment and Settlement Systems (PSS) are a key element of Financial Stability Their resilience during the crisis has validated the improvement efforts of the last decade: they helped prevent the crisis becoming even more serious than it actually was It is an incentive to keep on developing robust and efficient PSS 13

14 Post-crisis payment and settlement systems Tighter interdependencies PSS, like the financial markets and economies they support, are increasingly connected through complex interrelationships This has contributed to strengthen the global infrastructure by reducing several sources of settlement costs and risks But interdependencies have increased the potential for disruptions to spread quickly and widely across multiple PSS Global Financial Stability 14

15 Post-crisis payment and settlement systems Focus on CCPs G20 asked for standardized OTC derivatives to move to CCPs by end 2012 Several initiatives are ongoing to do so : legislation in US and Europe, FSB working group, Industry commitments, new CCP services This will concentrate risks on CCPs need to reinforce regulation, supervision, oversight and crisis management frameworks, on a coordinated basis, between all relevant authorities, in particular for cross-border or multi-currency CCPs. 15

16 Post-crisis payment and settlement systems Focus on CCPs IMF s position has been published in chapter 3 of the April Global Financial Stability Report on CCPs for OTC Derivatives: In an effort to improve market infrastructure following the crisis, CCPs are being touted as the way to make OTC derivative markets safer, sounder, more transparent, and enhance market efficiency. This chapter provides a primer on this topic, and discusses the key policy issues. It shows that soundly run and regulated CCPs will make OTC derivative markets more efficient, while reducing counterparty and systemic risk, but that they also concentrate credit and operational risk, and could actually increase systemic risk if not prudently risk managed and regulated. 16

17 Standards' revision CPSS/IOSCO is working to replace the 3 current sets of Standards by Principles for Financial Market Infrastructures, taking into account: A decade of implementation experience The lessons from the crisis FSB s demand to strengthen core financial infrastructures WB and IMF are co-chairing a WG to revise the assessment methodologies into a single one need to find the right balance between rule and risk-based approaches (taking the best of 2 worlds ) 17

18 Impact on FSAP FMI standards will be used for FSAP when endorsed by the IMF/WB boards, after the final CPSS/IOSCO report is published Meanwhile, assessments are focusing on systems relevant for global financial stability (e.g.us, China, UK, Germany, Luxembourg) CCPs are more systematically assessed G20 countries have committed to publish their assessments 18

19 Thank you for your attention, any questions? 19