Modifications to the Current List of Financial Soundness Indicators

Policy Papers ◽  
2013 ◽  
Vol 2013 (93) ◽  
Author(s):  
Keyword(s):  
International Organizations ◽  
Global Financial Crisis ◽  
Basel Iii ◽  
Executive Directors ◽  
Close Collaboration ◽  
Data Gaps ◽  
Financial Soundness ◽  
The Global Financial Crisis ◽  
International Experts ◽  
Current List

The purpose of this paper is to inform Executive Directors on the outcomes of consultations conducted by the IMF’s Statistics Department (STA) on revising the current list of FSIs in response to the global financial crisis and the adoption of a new regulatory framework under the Basel III Accord. In addition, the G-20 Data Gaps Initiative calls on the IMF to review the FSI list (Recommendation no. 2). STA has undertaken these consultations in close collaboration with a broad-based group of national and international experts, international standard setting bodies, IMF’s relevant departments and all FSI-reporting countries and concerned international organizations

scholarly journals Corporate governance and performance of listed commercial banks in South Africa

2014 ◽  
Vol 11 (2) ◽  
pp. 677-687
Author(s):  
Sam Ngwenya
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
The United States ◽  
Executive Directors ◽  
Governance Indicators ◽  
And Performance ◽  
The Global Financial Crisis ◽  
The Relationship

The global financial crisis of 2008 that resulted in the collapse of many financial institutions in the United States (US) and Europe have resulted in debates over the failures of corporate governance structures to properly protect investors. The main objective of the study was to determine the relationship between corporate governance and performance of listed commercial banks in South Africa. The results of the study indicated a statistically positive significant relationship between board size, proportion of non-independent and non-executive directors and bank performance. The results of the rest of the corporate governance indicators are mixed when using different performance measurement variables.

scholarly journals Asymmetric Procyclicality of Chinese Banking and the Countercyclical Buffer of Basel III

2015 ◽  
Vol 2015 ◽  
pp. 1-9
Author(s):  
Yufeng Li ◽  
Zhongfei Li
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Capital Requirements ◽  
Basel Iii ◽  
Time Varying ◽  
Regulatory Capital ◽  
Economy Growth ◽  
The Global Financial Crisis ◽  
Chinese Banking

Since the global financial crisis of 2007-2008, the importance of the procyclicality in the banking sector has been highlighted. One of the Basel III objectives is to promote countercyclical buffers and reduce procyclicality. We apply time-varying copula combined with GARCH model to test the existence of asymmetric procyclicality of Chinese banking. The results show that the procyclicality of Chinese banking is asymmetric, where the dependence between loan and economy growth is more correlated during the decline stage than the rise stage of economy. Based on this asymmetry, we suggest that the authority can use high frequent index for signalling the start point of releasing countercyclical buffer and accelerate the releasing pace to avoid the supply of credit being constrained by regulatory capital requirements in downturns.

Eighth Review of the Fund’s Data Standard Initiatives

Policy Papers ◽  
2012 ◽  
Vol 2012 (04) ◽  
Author(s):  
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Data Standards ◽  
Data Standard ◽  
Data Gaps ◽  
The Global Financial Crisis

This paper reports on developments in the Data Standards Initiatives since the Seventh Review of the Fund’s Data Standards Initiatives (December 2008), and presents proposals for further enhancing the SDDS, and for data categories for the new higher tier of the data standards, the SDDS Plus. The SDDS Plus is primarily intended for subscribers to the SDDS with systemically important financial sectors while contributing to address further the data gaps revealed in the global financial crisis. This new tier is designed to enhance and supplement the Fund’s Data Standards Initiatives and not to replace the SDDS.

scholarly journals Transformation of the Ukrainian banking system regulation: a new horizon of compliance with the international framework

2019 ◽  
Vol 14 (4) ◽  
pp. 22-33
Author(s):  
Lyubov Khudoliy ◽  
Oleg Bronin
Keyword(s):  
Systematic Approach ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Banking System ◽  
Basel Iii ◽  
Banking Supervision ◽  
Macroeconomic Shocks ◽  
Bank Supervision ◽  
Banking Institutions ◽  
The Global Financial Crisis

This article discusses the latest methodological recommendations of the Basel Committee on Banking Supervision developed in response to the effects of the global financial crisis and known as Basel III. The purpose of the study is to explore scientific approaches to justifying bank regulation as a key condition for overcoming the economic crisis and improving financial sustainability. The object of research is Basel III instruments that will be implemented in the bank regulatory policy of Ukraine. The systematic approach and systemic thinking used in the article allow one to substantiate the expediency of Ukrainian banking institutions’ governance based on the risk-oriented approach and to determine the strategy of bank supervision for the next 1-3 years. The study evaluates the results of stress testing of the largest banks in Ukraine. Thus, the results confirm that the banking sector in Ukraine is sufficiently capitalized in the absence of macroeconomic shocks, but in case of a crisis, some of these banks are not protected. Therefore, the article formulates recommendations for improving the regulation of these banks, the phased implementation of Basel III, the application of new principles, standards, tools and methods, corporate governance and risk management in Ukrainian banks.

scholarly journals Developing “best practices” for bankers’ pay in line with Basel III.

2011 ◽  
Vol 1 (3) ◽  
pp. 7-16 ◽  
Author(s):  
Peiyi Yu ◽  
Jessica Hong Yang ◽  
Nada Kakabadse
Keyword(s):  
Financial Crisis ◽  
Risk Taking ◽  
Global Financial Crisis ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Incentive Compensation ◽  
Basel Iii ◽  
Bank Capital ◽  
Bank Executives ◽  
The Global Financial Crisis

This paper proposes hybrid capital securities as a significant part of senior bank executive incentive compensation in light of Basel III, a new global regulatory standard on bank capital adequacy and liquidity agreed by the members of the Basel Committee on Banking Supervision. The committee developed Basel III in a response to the deficiencies in financial regulation brought about by the global financial crisis. Basel III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage. The hybrid bank capital securities we propose for bank executives’ compensation are preferred shares and subordinated debt that the June 2004 Basel II regulatory framework recognised as other admissible forms of capital. The past two decades have witnessed dramatic increase in performance-related pay in the banking industry. Stakeholders such as shareholders, debtholders and regulators criticise traditional cash and equity-based compensation for encouraging bank executives’ excessive risk taking and short-termism, which has resulted in the failure of risk management in high profile banks during the global financial crisis. Paying compensation in the form of hybrid bank capital securities may align the interests of executives with those of stakeholders and help banks regain their reputation for prudence after years of aggressive risk-taking. Additionally, banks are desperately seeking to raise capital in order to bolster balance sheets damaged by the ongoing credit crisis. Tapping their own senior employees with large incentive compensation packages may be a viable additional source of capital that is politically acceptable in times of large-scale bailouts of the financial sector and economically wise as it aligns the interests of the executives with the need for a stable financial system.

scholarly journals BANKING FLOWS AND FINANCIAL CRISIS FINANCIAL INTERCONNECTEDNESS AND BASEL III EFFECTS

2012 ◽  
Vol 03 (01) ◽  
pp. 1240001 ◽  
Author(s):  
Swati R. Ghosh ◽  
Naotaka Sugawara ◽  
Juan Zalduendo
Keyword(s):  
Financial Crisis ◽  
Emerging Markets ◽  
Structural Changes ◽  
Global Financial Crisis ◽  
Stable Region ◽  
Basel Iii ◽  
Advanced Economies ◽  
Financial Interconnectedness ◽  
The Global Financial Crisis ◽  
Capital Regulations

This paper examines the factors that determine banking flows from advanced economies to emerging markets. In addition to the usual determinants of capital flows in terms of global push and local pull factors, we examine the role of bilateral factors, such as growth differentials and economic size, as well as contagion factors and measures of the depth in financial interconnectedness between lenders and borrowers. We find profound differences across regions. In particular, in spite of the severe impact of the global financial crisis, emerging Europe stands out as a more stable region. Assuming that the determinants of banking flows remain unchanged in the presence of structural changes, we use these results to explore the short-term implications of Basel III capital regulations on banking flows to emerging markets.

8. Micro-prudential regulation I

2019 ◽  
pp. 329-406
Author(s):  
Iris H-Y Chiu ◽  
Joanna Wilson
Keyword(s):  
Financial Crisis ◽  
Risk Taking ◽  
Global Financial Crisis ◽  
Basel Ii ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Prudential Regulation ◽  
Basel Committee ◽  
The Global Financial Crisis ◽  
Capital Adequacy Regulation

This chapter studies capital adequacy regulation, which prescribes that banks can only take certain levels of risk that are supported by adequate levels of capital. In this way, capital adequacy rules provide a form of assurance that banks with adequate levels of capital are likely able to withstand losses that may result from their risk-taking. The Basel Committee developed its first set of capital adequacy standards in the Basel I Capital Accord of 1988. It was subsequently overhauled into the Basel II Capital Accord in 2003. After the global financial crisis of 2007–9, the Basel II Accord’s shortcomings were extensively discussed and the Basel Committee introduced a package of reforms in order to plug the gaps in Basel II. The Basel III package is the most extensive suite of micro-prudential regulation reforms seen to date, as they deal with capital adequacy and a range of other micro-prudential standards.

scholarly journals New Banks’ Business – Rating Competence for the Real Sector

2017 ◽  
Vol 8 (1) ◽  
pp. 124-132
Author(s):  
Gunther Meeh-Bunse ◽  
Anke Hermeling
Keyword(s):  
Business Models ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Supplier Evaluation ◽  
Rating Data ◽  
New Business ◽  
Internal Rating ◽  
Financial Soundness ◽  
The Global Financial Crisis ◽  
Credit Institutions

Abstract Background: The global financial crisis has revealed the urgency of changes in the business models of banks around the world. Due to rising regulatory costs and the effects of the low-interest rate phase, the revenue of banking sector is under pressure. Banks have to generate new sources of revenue. A conceivable externalization of bank internal rating data is appropriate. This available knowledge has a potential to generate new business potentials. Objectives: The goal of this paper is to compare the procurement of internal ratings by credit institutions and the supplier evaluation, particularly regarding the assessment of their financial capacity, as well as the identification of potential interfaces. Methods/Approach: The methods used in the research included an example-oriented presentation and an analysis of indicator systems aimed at assessing the financial soundness within the internal rating by credit institutions and the supplier evaluation. Results: Results show the intersections between the two evaluation systems. Conclusions: Despite the determination of evaluation results by their objective function, apparently significant trends of financial (dis)soundness can be recognized as a part of the two evaluating systems. This result provides starting points to initiate the discussion about a possible (partial) externalisation of internal ratings by credit institutions to be used for the supplier evaluation.

scholarly journals The Impact of the Global Financial Crisis on the Management of Banking Risks

Equilibrium ◽  
2010 ◽  
Vol 5 (2) ◽  
pp. 33-45
Author(s):  
Alina Manta ◽  
Roxana Nanu
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Absorption Capacity ◽  
External Financing ◽  
Financial Soundness ◽  
Global Liquidity ◽  
The Global Financial Crisis ◽  
External Sector ◽  
The Impact

The international macroeconomic and financial environment has undergone major negative changes since the global financial crisis. The magnitude and intensity of the economic and financial crisis have been underestimated by authorities worldwide. The uncertainties surrounding future developments remain high. In Romania, the main challenges posed by the external sector refer to the worsening perception of risks, including contagion effects from the adverse regional developments, the contraction of external markets, the less readily available external financing and the replacement of global liquidity risk by solvency risk. In spite of this, the banking sector continued to report positive financial soundness indicators, displaying and noticeable financial results. Stress testing analyses indicate a solid absorption capacity of moderate shocks. On the other hand, we proposed ourselves to quantify the degree of correlation between the European and Romanian banking systems through the solvency indicator using the trend analysis.

6. UK banking supervision and regulatory architecture

2019 ◽  
pp. 231-280
Author(s):  
Iris H-Y Chiu ◽  
Joanna Wilson
Keyword(s):  
Global Financial Crisis ◽  
Formal System ◽  
Bank Regulation ◽  
Market Regulation ◽  
Bank Supervision ◽  
Regulatory Architecture ◽  
Financial Soundness ◽  
Banking Business ◽  
The Global Financial Crisis ◽  
The Uk

This chapter addresses the UK bank supervision and regulatory architecture. Although banking business has existed in England since the seventeenth century, banks enjoyed no formal system of regulation until the introduction of the Banking Act of 1979. Over the years, the scope and intensity of regulation increased. After the global financial crisis, further changes were made to bank regulation as well as the regulatory architecture in the UK for bank regulation. The regulatory architecture introduced in April 2013 is characterised as ‘twin peaks’, that is, having two main agencies that are responsible for different regulatory objectives. The Prudential Regulation Authority (PRA) is responsible for ‘prudential’ objectives—that is, the solvency and financial soundness of financial institutions—while the Financial Conduct Authority (FCA) is responsible for conduct of business and market regulation, including promoting competition. The PRA and FCA enjoy a wide berth of rule-making and enforcement powers.

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