Category Financial Sector Assessment

IFC publishes the Emerging Markets Database (EMDB).

EMDB contains the latest figures for all IFC indices—global, investable, industry, and frontier—and on market data such as prices, corporate actions, and stock ID information. The database provides three levels of data: comprehensive data on individual stocks cov­ered in all markets, data series for each index computed, and data series for each market covered. It also includes the following:

• Years covered: varies by country and indicator

• Countries covered: emerging market countries

C.3.7 World Bank

The World Bank produces the world development indicators database...

The “efficient resolution of problems in banks” is mentioned in the Core Principles for Effective Banking Supervision (BCP) issued by the BCBS as one of the key precondi­tions for effective banking supervision. Other preconditions are jointly the sound and sustainable macroeconomic policies, a well-developed public infrastructure, an effective market discipline, and the mechanisms for providing appropriate systemic protection. In addition, earlier reviews of lessons from BCP assessments by World Bank and IMF staff members have recommended that, in view of their importance, adequate procedures for the resolution of problem banks should be made an integral part of the BCP assessments...

Translating a macroeconomic framework into the balance sheet of a financial institution requires mapping macrovariables into a set of common risk factors that can be applied to stress individual balance sheets. Applying a stress to an individual balance sheet under the bottom-up approach involves shocking the risk factors that determine the underly­ing value of a portfolio and then revaluing that portfolio. Because most portfolios have numerous instruments, each with a unique price, the process of revaluing a portfolio may require knowledge of hundreds or thousands of market prices. Financial institutions typically simplify this process by mapping each element of a portfolio into a smaller set of common risk factors...

Bank restructuring should not distort competition, subsidize failure, or penalize the more efficient banks in the system. This principle may be contained in competition law and enforced by the relevant authorities, though often in cooperation with the banking authorities.

G.5.3.6 Accountability and Transparency of Process

Bank restructuring should be carried out in a framework of fairness and transparency. Autonomous banking authorities should be held accountable for their actions. In par­ticular, information should be made public about the rationale for important decisions, such as those involving the use and allocation of public funds, government assumption of control and ownership of a weak bank on systemic stability grounds (see section G.5...

Having separate experts for sectoral stability and development analysis will overburden the country and impose excessive administrative costs. It will also result in a team that is too large to allow for adequate synthesis of what are indeed overlapping issues. Therefore, there seems little merit in including a large team of “development specialists” alongside prudential specialists. In the case of many sectors, such as insurance and capital markets, the same expert who analyzes stability aspects should also be able to assess developmental aspects. This arrangement will not only avoid duplication but also guarantee consistency across the two dimensions. Staffing the assessment of the sectors should be designed with this multitasking in mind.

In the case of banking, always the most impo...

Overview

Around the world, many countries are reconsidering the institutional structure of regula­tory and supervisory agencies in the financial sector. This reconsideration reflects the concern that the existing structures—which were often established in a markedly dif­ferent market and institutional environment than exists today—may have become inappropriate to meet the key regulatory objectives effectively. These objectives include fostering market efficiency and promoting market confidence and stability. As countries reassess and then implement changes in their regulatory and supervisory architecture, a number of issues are raised in relation to both the developmental and stability aspects of the financial sector’s evolution.

From the developmental perspective, the main questio...