Georgia Financial Sector Assessment Program Technical Note Selected Issues In Banking Supervision
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Georgia Financial Sector Assessment Program Technical Note Selected Issues In Banking Supervision
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Author : International Monetary
language : en
Publisher: International Monetary Fund
Release Date : 2021-09-30
Georgia Financial Sector Assessment Program Technical Note Selected Issues In Banking Supervision written by International Monetary and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-09-30 with Business & Economics categories.
This note was prepared for the 2021 FSAP mission to Georgia and provides recommendations on a select set of banking supervision topics against relevant elements of the Basel Core Principles for Effective Banking Supervision. The current review focused on implementation and effectiveness of recent changes to the Georgian banking supervisory framework, and included actions being taken or planned to address current challenges facing Georgian authorities.
Perspectives De L Conomie Mondiale
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Author :
language : en
Publisher:
Release Date : 1995
Perspectives De L Conomie Mondiale written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1995 with categories.
Switzerland
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Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: International Monetary Fund
Release Date : 2019-06-27
Switzerland written by International Monetary Fund. Monetary and Capital Markets Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-06-27 with Law categories.
Financial Sector Assessment Program; Technical Note-Selected Issues on Banking Supervision
Georgia
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Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: International Monetary Fund
Release Date : 2015-01-08
Georgia written by International Monetary Fund. Monetary and Capital Markets Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-01-08 with Business & Economics categories.
There have been significant improvements in both the quality of regulation and the supervisory approach since the 2007 FSAP. Many amendments to existing laws, new laws, and regulations have been introduced, aimed at addressing shortfalls identified in the 2007 FSAP. These improvements will be evident throughout this assessment. At the same time, a number of weaknesses have been identified. Among these is an operational risk within the NBG’s own Banking Supervisory Department. There has been a very high level of staff turnover in recent years due to a lack of salary competitiveness vis-à-vis the commercial banks, and there appears to be over-reliance on key personnel. Also, the level and type of staff training need to be expanded. While the NBG puts significant effort into understanding the risk profile of each individual bank and the banking system as a whole, more attention is needed to improve the quality of risk management of the banks. In a number of areas, notably bank licensing, the NBG relies on its broad supervisory powers to carry out its functions in the absence of detailed explicit powers. While this regime generally seems to work well in practice, it could leave the NBG open to challenge where these broad powers are not supported by more granular powers. Recently, several amendments to the legislation have been introduced in order to address these shortcomings.
Georgia
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Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: International Monetary Fund
Release Date : 2015-01-08
Georgia written by International Monetary Fund. Monetary and Capital Markets Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-01-08 with Business & Economics categories.
The Georgian banking sector is sound and stable and has continued to perform well, but faces a number of key risks and vulnerabilities that need to be closely monitored. Particularly challenging among them are credit and funding risks related to dollarization, concentration in the banking sector, and reliance on nonresident deposits. While NPLs are gradually declining from their peak in 2009, credit growth is above its long-term sustainable trend. Dollarization presents specific challenges as it increases credit and liquidity risks. There are two major dollarization-related problems: First, most of the borrowers in U.S. dollars (USD) are unhedged, as their income and expenditures are in national currency (this is especially evident in case of households). Second, the NBG has limited ability to provide liquidity support in USD and other foreign currencies. However, it should be noted that the NBG is implementing a set of macroprudential measures aimed at making FX lending more expensive for banks. For example, current risk weights for FX loans are topped at 175 percent. Separate stress tests (STs) performed by the NBG and by the FSAP mission show that the banking system as a whole is able to withstand severe shocks, given that most banks maintain healthy capital buffers well above regulatory minimum. The tests were conducted in several scenarios ranging from slow growth to severe macroeconomic shocks, and the results show that major banks would generally remain adequately capitalized, taking into account current profits and introduction of Basel II. In adverse scenarios, recapitalization needs are manageable in terms of GDP (1.6 percent for the worst-case scenario). At the same time, uncertainty due to non-linearity of shocks related to lari depreciation warrant continuation of build-up of capital buffers as long as FX denominated loans constitute substantial share of banks’ loan portfolios. Credit portfolio concentration risks are limited: default by the largest three borrowers would require additional capital of GEL 50 million for five banks. Market risks are very limited, and trading books do not exist. However, some banks are particularly vulnerable and need to strengthen their capital buffers and to mitigate funding risks. These banks exceed the minimum capital requirement by only a few percentage points (p.p.), which limits their loss-absorption capacity. The high level of profitability and solid net interest margins would go down during crisis periods, driving down net interest and other income. To avoid this pitfall, it is important to introduce Individual Capital Guidance, especially for the weakest banks. When it comes to funding risks, further diversification of funding sources and de-dollarization could help to minimize identified vulnerabilities.
Georgia Financial Sector Assessment Program Technical Note Financial Safety Net Resolution And Crisis Management
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Author : Jack Boorman
language : en
Publisher: International Monetary Fund
Release Date : 1994
Georgia Financial Sector Assessment Program Technical Note Financial Safety Net Resolution And Crisis Management written by Jack Boorman and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with Business & Economics categories.
Since the prior FSAP the authorities have comprehensively updated the legal, policy and procedural framework for failing bank resolution. In 2019 both the NBG and Banking Laws were amended to provide the authorities with powers to resolve banks that in the past might have been deemed too-big-to-fail; this eventuality is now greatly diminished. In 2017 a Deposit Insurance System Law was adopted to provide protection to natural person depositors when a bank fails and is liquidated. In 2020 the NBG published a series of rules specifying its policies and procedures for the use of its new powers, and jointly with the MoF published regulations addressing the use of temporary public funding to mitigate the potential systemic implications of bank failures.
Georgia
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Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: International Monetary Fund
Release Date : 2015-01-08
Georgia written by International Monetary Fund. Monetary and Capital Markets Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-01-08 with Business & Economics categories.
Recent experience in handling troubled banks was limited. The National Bank of Georgia (NBG) is the lead authority responsible for managing problem banks, as it can appoint a temporary administrator, declare a bank as insolvent and bankrupt, and commence a liquidation procedure. In the 1990s, market entry was not subject to significant restrictions, and the number of banks operating in Georgia reached a peak of 229 in 1994. Since then, the authorities have commenced a significant number of liquidation procedures, and the last cases based on insolvency grounds have been closed in 2009. Therefore, the legal framework for bank resolution and liquidation has not been applied to a significant extent in recent times. The framework for emergency liquidity assistance (ELA) has been improved, but enhancement is needed to protect the NBG against financial risk. The NBG is explicitly authorized to provide ELA to commercial banks that are considered to be viable, and a 2012 NBG decree sets out certain procedural rules governing the disbursement of the ELA. However, when financial stability is endangered, rules on collateral, interest rate, and duration of the facility can be relaxed. This special carve-out can expose the NBG to financial risks—the existence of a systemic threat, rather, calls for a role to be played by the government. Moreover, provisions on collateral, interest rate, and duration should be updated to better take into account the specificities of ELA, and accountability mechanisms should be enhanced. The bank resolution and liquidation regime presents important shortcomings. The NBG can take control of a problem bank by appointing a temporary administrator, which can, in theory, arrange for certain resolution transactions. The bank liquidation framework is prescribed in more detail, given the significant experience gained by the NBG in the past. However, the bank resolution framework lacks a number of important features and several amendments are needed to update it in line with emerging international best practices, with a view to enabling the authorities to implement a speedy and cost-effective resolution process.
Malta
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Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: International Monetary Fund
Release Date : 2019-11-21
Malta written by International Monetary Fund. Monetary and Capital Markets Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-11-21 with Business & Economics categories.
This technical note on banking supervision for Malta focusses on selected topics in relation to the supervision of less significant institutions, which are not directly supervised by the European Central Bank, and on non-European Union branches. The Malta Financial Services Authority’s (MFSA) internal organization reflects its role of an integrated supervisor, and several units are involved in supervision and/or enforcement. Review of supervisory measures reveals that the MFSA has taken decisive action in several instances, but such actions have not been timely. A new organizational structure of the MFSA has been proposed recently. Developing resources devoted to enforcement will enable the unit to spend less time on the preparation of the sanctions and more time on ongoing supervisory monitoring. Involving the head of enforcement and the General Counsel in the decision-making process is positive. The report recommends developing a five-year plan to increase the MFSA’s budgetary resources and capacity to reflect the size and importance of the financial sector in Malta.
Ireland
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Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: International Monetary Fund
Release Date : 2022-07-27
Ireland written by International Monetary Fund. Monetary and Capital Markets Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-07-27 with Business & Economics categories.
Supervision of less significant institutions (LSIs) is largely effective in Ireland. The Central Bank’s supervisory approach to LSIs is intrusive and well-developed supervisory tools are appropriately applied. To enhance the capacity of supervisory tools and approaches, the supervision leverages on its membership in the Single Supervisory Mechanism (SSM). Supervision has sufficient rigor, although some gaps in the enforcement framework yet to be covered by the legislative changes planned for 2022.2 The supervisory responses to changing conditions are timely and agile. The expertise of supervisors is expanding with the development of the market, although keeping up its pace can be a challenge. The independence of banking supervision is strong in practice, and benefits from the safeguards of the SSM. Recent efforts to enhance cooperation between prudential and conduct supervision of banks (Central Bank’s “One Bank” approach) has raised the quality of supervision, although scope remains for further enhancements to unleash the full potential of integrated prudential and conduct supervisory functions framed by strong cooperation arrangements and operational processes.
Ireland Financial Sector Assessment Program
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Author : International Monetary Fund. Monetary and Capital Markets Department
language : en
Publisher: International Monetary Fund
Release Date : 2016-09-29
Ireland Financial Sector Assessment Program written by International Monetary Fund. Monetary and Capital Markets Department and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-09-29 with Business & Economics categories.
This Technical Note discusses the findings and recommendations made in the Financial Sector Assessment Program for Ireland in the areas of banking supervision and observance of the Basel core principles. The effective operational implementation of the Single Supervisory Mechanism (SSM) is well established in Ireland, and all authorities are actively engaged and committed to the new supervisory framework led by the European Central Bank. The SSM has further strengthened the prudential regulation and supervision of banks since the time of the 2013 assessment. The transition to the operational implementation of the SSM has not resulted in major gaps in banking supervision, but some transitional challenges remain.