European Union: Publication of Financial Sector Assessment Program Documentation—Technical Note on Progress with Bank Restructuring and Resolution in Europe
IMF Staff Country Reports, March 15, 2013
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- European Union: Publication of Financial Sector Assessment Program Documentation—Technical Note on Progress with Bank Restructuring and Resolution in Europe
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Bibliographic details
- Published: March 15, 2013
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781475559996.002
Summary
- Publication date: March 15, 2013
- This article is an analysis on the restructuring banking system of the European Union.
- The global financial crisis created the need to restructure by immensely reflecting weaknesses in the public, households, corporate, and other financial sectors.
- Restructuring areas identified include:
- strengthening of bank resolution tools
- activation of nonperforming loans
- maintenance of macrofinancial framework
- recovery of market access
- other measures to enhance financial stability
- The Executive Board recommends this transition for the European Union because it "paves the way to financial stability globally."
Findings and analysis
- The global financial crisis exposed significant weaknesses across:
- public sector finances
- household balance sheets
- corporate sector finances
- other financial sector participants
- Restructuring measures focus on both microprudential instruments (e.g., bank resolution tools, nonperforming loan strategies) and macroprudential/macrofinancial frameworks to restore market confidence and access.
- Emphasis on the role of strengthened resolution frameworks in supporting orderly restructurings and reducing systemic spillovers.
Policy recommendations and actions
- Strengthen bank resolution tools and frameworks to manage failing institutions effectively.
- Activate and address nonperforming loans to restore balance-sheet health and improve credit intermediation.
- Maintain a robust macrofinancial framework to support financial stability during and after restructuring.
- Facilitate recovery of market access for banks and sovereigns through credible policy and structural reforms.
Subjects and keywords
- Subject: Bank resolution, Bank resolution framework, Banking, External balance assessment (EBA), External position, Financial crises, Financial institutions, Financial sector policy and analysis, Financial sector stability, Nonperforming loans
- Keywords: asset, bank, bank resolution, Bank resolution, Bank resolution framework, bridge bank, CR, EU banking assets, EU country, EU government, Europe, External balance assessment (EBA), Financial sector stability, Global, IMF EU FSAP FSSA, ISCR, Nonperforming loans, resolution directive, restructuring plan, RWAs calculation
International Monetary Fund. Monetary and Capital Markets Department "European Union: Publication of Financial Sector Assessment Program Documentation—Technical Note on Progress with Bank Restructuring and Resolution in Europe", IMF Staff Country Reports 2013, 067 (2013).