The Role of the Prudential Supervision and Financial Restructuring of Banks During Transition to Indirect Instruments of Monetary Control

Author/Editor:

International Monetary Fund

Publication Date:

November 1, 1996

Disclaimer: This Working 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 proposes a stylized sequencing of banking supervision and bank restructuring measures designed to complement and expedite the adoption of indirect instruments of monetary policy. Appropriate sequencing reflects both operational considerations and macroeconomic effects of structural measures. It typically involves implementing initially a critical mass of reforms of prudential supervision and of financial structure of both banks and enterprises, and subsequently adapting and refining these measures in line with the evolution of markets and internal governance. This approach facilitates implementation because the initial cost of bank restructuring can be offset, partly, through the budgetary effects of improved enterprise finances.

Series:

Working Paper No. 96/128

Subject:

English

Publication Date:

November 1, 1996

ISBN/ISSN:

9781451935455/1018-5941

Stock No:

WPIEA1281996

Format:

Paper

Pages:

30

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