Large and Complex Financial Institutions: Challenges and Policy Responses - Lessons from Sweden

Author/Editor: Johnston, R. B. ; Horváth, Balázs ; Errico, Luca ; Chai, Jingqing
Publication Date: March 01, 2003
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Disclaimer: This Policy Dicussion Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This paper examines the regulatory and supervisory implications stemming from the dominance of large and complex financial institutions, drawing on the recent Financial Sector Assessment Program (FSAP) mission work on Sweden. The analysis highlights the importance of consolidated supervision, of a greater emphasis on effective management and corporate governance structures, and of measures strengthening the disciplinary role of the private sector. It calls for developing credible liquidity and crisis management arrangements through appropriate attention to the cross-product and cross-border nature of large and complex financial institution (LCFI) operations. Strengthened supervisory and regulatory responses will enable financial markets to better assess the nature and sources of residual risks they have to face and, on this basis, to develop more effective risk-mitigating measures.
Series: Policy Discussion Paper No. 03/1
Subject(s): Financial Sector Assessment Program | Sweden | Capital markets

Publication Date: March 01, 2003
Format: Paper
Stock No: PPIEA0012003 Pages: 24
US$15.00 (Academic Rate:
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