Spain: Financial Sector Assessment Program: Technical Note: Nonfinancial Equity Investments of Spanish Credit Institutions
IMF Staff Country Reports, June 14, 2006
Source details
- Canonical URL
- Spain: Financial Sector Assessment Program: Technical Note: Nonfinancial Equity Investments of Spanish Credit Institutions
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Bibliographic details
- Published: June 14, 2006
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451812176.002
Summary
- This note assesses the risk profile of the nonfinancial equity investments of Spanish credit institutions (CIs), based on a market-risk approach.
- It assesses the main features of the situation and indicates the problems of CIs’ nonfinancial equity investments.
- It presents the evolution of nonfinancial equity investments, and their importance for the economy.
- It analyzes using the value-at-risk (VaR) approach.
- It recommends enhancing of risk management practices and surveillance with regard to CIs with a significant nonfinancial equity investment, and encourages those CIs to adopt the market-based approach.
Key analysis and findings
- Focus: nonfinancial equity investments of Spanish credit institutions (CIs).
- Methodology: market-risk approach, including analysis using the value-at-risk (VaR) approach.
- Issues identified: problems associated with CIs’ nonfinancial equity investments (the note "indicates the problems" of these investments).
- Coverage: evolution of nonfinancial equity investments and their importance for the economy.
Policy recommendations
- Enhance risk management practices with regard to CIs with a significant nonfinancial equity investment.
- Strengthen surveillance of CIs that hold significant nonfinancial equity investments.
- Encourage CIs with significant nonfinancial equity investments to adopt the market-based approach.
Subject areas and keywords
- Subject: Banking, Basel II, Commercial banks, Econometric analysis, Financial institutions, Financial markets, Financial regulation and supervision, Stock markets, Stocks, Vector autoregression
- Keywords: Basel II, capital absorption, Commercial banks, CR, credit institution, equity, equity exposure, equity investment, equity method, equity volatility, Europe, ISCR, merchant banking activity, savings bank, Stock markets, Stocks, Vector autoregression