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Financial Sector Policies

These courses, presented by the IMF Institute and Monetary and Capital Markets Department, provide a basic understanding of finance to assess benefits and costs of financial instruments, institutions, and markets in a macroeconomic context with focus on risk and mitigating policies. The courses also cover banking supervision, stress testing, financial regulation, and macro-financial risk analysis.


This online course, presented by the IMF Institute for Capacity Development, introduces participants to the fundamentals of financial analysis that are in the toolkit of policymakers. These tools are used to study the characteristics of various financial instruments and their pricing, analyze portfolios of assets, and become familiar with the basics of risk management. Mastery is essential for participants who wish to participate in more advanced and policy-oriented ICD courses in financial or macrofinancial areas. The FMAx course covers, among other topics, pricing of fixed-income securities and equity; the term structure of interest rates; portfolio allocation and diversification; and an introduction to risk management.

FMAx was originally designed as a 7-week course with an 8-10 hours weekly workload. It can now be taken entirely at your own pace over a period of one year.


This course, presented by the IMF Institute, explains the macroeconomic relevance of financial development and inclusion. Beginning with an analysis that defines the role of finance in the economy, the course reviews the theoretical and empirical literature on the impact of finance on macroeconomic performance and growth. It also addresses policies to encourage financial development (market-enabling policies) and limit its potentially destabilizing effects (market-harnessing policies). The course introduces financial inclusion as an integral dimension of financial development—a perspective that has only recently received proper attention because for many years the discussion instead centered on the concept and measurement of financial depth. The course reviews the indicators currently used to measure financial inclusion, its distinct macroeconomic impact, and the main policy strategies usually pursued.


This course, presented by the IMF Institute for Capacity Development, begins with an overview of how risks are transmitted within and between the financial and real sectors. Participants then examine the design and impact of financial sector policies for mitigating vulnerabilities by starting with the rationale for both microprudential and macroprudential policies. The interactions between macroeconomic and prudential policies are also discussed. Although the emphasis will be on preventive strategies, the course will discuss policies to deal with distress situations. The combination of lectures, case studies, and hands-on workshops allows participants to discuss and experiment with various policies to gauge their outcomes, intended and unintended. Those who are primarily interested in risk assessment are referred to the Financial Sector Surveillance course, where that is the focus.


This course, presented by the IMF Institute for Capacity Development, introduces participants to key concepts and tools used in the identification and assessment of financial sector vulnerabilities and sources of strength. The course materials provide a basic toolkit to assess financial sector risks and to measure them against existing capital and liquidity buffers in the financial system. The discussions focus on the early identification of unwarranted macro-financial imbalances and the analysis of the transmission of financial distress across institutions, markets, and economic sectors, with the objective of reducing the likelihood and the severity of financial crises. A combination of lectures and hands-on workshops allows participants to apply essential risk assessment techniques.


This course, presented by the IMF Institute for Capacity Development, is designed to give participants a foundation of financial instruments beyond the standard treatment of bonds and equity covered in the FMAx. After a short review, the course takes on forwards, futures, swaps, and options and moves to combining these building block instruments with practical applications. Some time is devoted to the policy implications, notably related to regulation of financial markets, though a separate course devoted to financial sector policies is recommended for those interested in more detail. Lectures introduce the underlying theory; workshops and case studies allow the participants to apply the techniques introduced and test their understanding of how and why some strategies and misuse of financial instruments can lead to large losses and financial instability. Participants will prepare final presentations on a set of predetermined current financial market issues.

This course, presented by the IMF Monetary and Capital Markets Department, provides a comprehensive overview of conceptual and operational issues related to restructuring and resolution of weak banks. Among the topics discussed during the course are:

  • Identification and supervision of weak banks: common causes of banking problems and how to identify them, supervisory approaches for dealing with weak banks, and techniques for quantifying systemic banking problems (asset quality reviews and stress tests). 
  • Crisis preparedness: building blocks of effective resolution regimes, guided by the Financial Stability Board’s Key Attributes of Effective Resolution Regimes; recovery and resolution planning; initiatives to test operational readiness; and the role of deposit insurance and depositor preference.
  • Crisis containment: actions to contain emerging crises and reestablish public confidence, such as emergency liquidity support, asset and liability guarantees, and exceptional administrative measures to stop persistent liquidity outflows.
  •  Bank restructuring and resolution: early intervention measures; diagnosis, triage, and loss recognition; winding down nonviable banks; stabilization options to achieve continuity of systemically important functions; policy considerations and instruments for public capital support; governance of the restructuring process. 
  • Dealing with impaired assets: supervisory policies and strategies for the reduction of nonperforming loans; role of asset management companies.

This course, presented by the IMF Monetary and Capital Markets Department, provides a comprehensive view of conceptual and operational issues related to bank regulation and supervision. The course covers elements of micro- and macroprudential supervision, including the Basel core principles, banking regulation developments, liquidity requirements, and stress testing. The course also offers discussions and exercises on concrete applications and approaches often used by supervisors. Exercises simulating supervisory routines and analysis complement the lectures. Participants are expected to provide their own perspectives on and experience with the issues covered in the course.

This course, presented by the IMF Monetary and Capital Markets Department, reviews the latest developments in banking supervisory and regulation, such as changes to capital adequacy standards, the new Basel liquidity measurement rules, and supervision of systemically important banks. Sessions focus on aspects of particular relevance to each region and discuss both the main implementation challenges and their implications for banks and supervisory authorities. An Islamic banking component discusses similarities and differences in Islamic and conventional banking risks and the measurement of capital adequacy. Participants will be actively engaged through case studies and group exercises.

This course, presented by the IMF Monetary and Capital Markets Department, provides an overview of sound debt management practices and their interplay with the general macrofinancial environment. The course will cover governance, institutional arrangements, formulation and implementation of a Medium-Term Debt Management Strategy (MTDS), and development of a local bond market. The course will also address topics of particular importance to the Gulf Cooperation Council (GCC) countries, such as the sovereign asset and liability management framework (SALM), investor relations activities, and sovereign bond indices.

This course, presented by the IMF Monetary and Capital Markets Department, focuses on the Principles for Financial Market Infrastructures (PFMI), which enhance safety and efficiency in payments, clearing, settlement, and recording arrangements, and more broadly, limit systemic risk and foster transparency and financial stability. The workshop is designed to be interactive, using a combination of lectures, case study simulations, and panel discussions. Lectures focus on the PFMI’s 24 principles and 5 responsibilities for authorities, the Disclosure Framework, the Assessment Methodology, and such other important issues as cyber resiliency, distributed ledger technology, and fintech. After gaining a basic understanding of the standards, participants apply them to a hypothetical country to assess compliance with its payment and securities settlement systems and the central securities depository. The self-assessment exercises, based on crucial principles, cover legal basis, credit risk, collateral, default management, liquidity risk, central securities depositories, money settlements, general business risk, and operational risk. After a hands-on self-assessment experience, results are discussed through group presentations and debriefings.

This course, presented by the IMF Monetary and Capital Markets Department, discusses recent developments in stress testing for banks and gives participants the opportunity to learn and apply new tools used or created by MCM for stress testing purposes. Some of the tools are integral to the Financial Sector Assessment Program (FSAP) and technical assistance missions throughout the world. Moreover, the course allows participants to share their experiences with stress testing. The course reviews the objectives of stress testing and of methodologies and techniques currently used for that purpose and advises on some best practices for applying these techniques. Much of the course consists of hands-on modules that expose participants to the entire stress testing cycle, from entering data and estimating econometric models to create macro-financial links to designing assumptions, running tests, and summarizing and presenting the results.

Throughout, the focus is on the solvency and liquidity elements of the stress testing exercise. The course concludes with a roundtable discussion where participants exchange knowledge and share country experiences.

This course, presented by the IMF Monetary and Capital Markets Department, explains various aspects and issues related to asset classification and provisioning both from the prudential regulatory perspective and that of accounting/IFRS; it also explores the role of the supervisor in reconciling differences between the two perspectives. In addition to covering loan loss provisioning principles and the requirements of the Basel Committee on Banking Supervision (BBS), the course also discusses the credit loss recognition rules prescribed by International Accounting Standard (IAS) 39 and the upcoming expected loss framework (IFRS 9). The course will also tackle issues relating to implementing IFRS 9. Case studies and hands-on exercises will be provided to enhance the effectiveness of the course. Participants will also be invited (and should be prepared) to share their own experiences and views on this topic.

This course, presented by the IMF Monetary and Capital Markets Department, presents the fundamentals and goals of risk-based supervision (RBS), its challenges, and factors central to its success. Through a mix of lectures and practical applications the course covers the main RBS components and steps for putting it in place. It balances discussions of technical financial modeling, and less analytical bank supervision techniques.

The course begins by introducing RBS concepts and tools. The focus then turns to assessment of credit, liquidity, market, and operational risks and stress testing techniques. Finally, the course discusses how to combine information for constructing supervisory scores, developing supervision plans, and allocating supervision resources and activities.

This course, presented by the IMF Monetary and Capital Markets Department, examines selected issues in the evolving financial regulatory framework. It takes a critical look at the evolving framework for banks and non-bank financial intermediaries. On the banking side, topics include Basel III capital, leverage and liquidity requirements, and on-going regulatory discussions. On the non-bank side, the course covers derivatives, repurchase transactions and securities lending, counterparty risk management, and topical issues such as the role of central banks in collateral markets (among others). The course pays special attention to systemically important financial institutions and the links between banks and other parts of the financial system. Participants will be invited to make presentations on selected topics that reflect their country experiences.

This course, presented by the IMF Monetary and Capital Markets Department, is intended to broaden participants’ understanding of the main policy and operational issues in sovereign risk management, techniques used for active debt operations and debt market development, and sustained capital market access. Emphasis is given to the risk measurement of a bonded debt portfolio in the context of a sovereign’s overall balance sheet (assets and liabilities). The course specifically focuses on the lessons from the global financial and economic crisis for managing sovereign risk, public debt, and the interface with capital markets and financial stability. The course considers the following: „„

  • Effective organizational arrangements;
  • coordination with key policy areas, including monetary and fiscal policy;
  • building blocks for a framework for sovereign liability management, including objectives and identification of risks, and accountability;
  • technical and operational aspects of risk management;„„
  • identifying and monitoring sovereign risk, and good principles for stress testing a sovereign debt portfolio;
  • measuring key portfolio risks, including currency, interest rate, and refinancing exposures;
  • technical and implementation aspects of developing a medium-term debt management strategy; and
  • formulating debt issuance strategies taking account of the link between debt management and debt sustainability analysis.

This course, presented by the IMF Monetary and Capital Markets Department, provides a comprehensive overview of the theories, tools, and techniques necessary for thorough assessment of financial sector surveillance and banking-sovereign interactions. Among the topics covered are:

  • extracting information from balance sheets and market information;
  • tools for monitoring systemic risk;
  • risk-adjusted balance sheets for corporations and financial institutions using contingent claims analysis (CCA);
  • how credit risk and funding costs are affected by changes in balance sheets and market risk appetite;
  • systemic risk assessment using a variety of models, their pros and cons, and how they are related;
  • sovereign-risk-adjusted balance sheet calibration;
  • „enhanced macro stress testing using CCA;
  • macrofinancial risk analysis and joint bank-sovereign stress testing;
  • modeling links and feedback between macro variables, and indicators of corporate, banking, household, and sovereign risk;
  • analysis of country cases when high-frequency and market data are available; and
  • analysis that can be carried out in data-constrained countries (illustrated by country case studies and workshops with spreadsheets).
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