Integrating Stability Assessments Under the Financial Sector Assessment Program into Article IV Surveillance-Background Material
Policy Papers, August 31, 2010
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- Integrating Stability Assessments Under the Financial Sector Assessment Program into Article IV Surveillance-Background Material
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Bibliographic details
- Published: August 31, 2010
- Series: Policy Papers
Purpose and scope
- Presents the staff analysis underpinning two central elements of the proposal to make financial stability assessments under the FSAP mandatory for members with systemically important financial sectors.
- Covers:
- the definition of systemic importance used in the paper and the methodology for identifying members with systemically important financial sectors (Section II); and
- the review of the literature and industry practices that form the basis for the staff proposal to conduct these mandatory financial stability assessments at a frequency of about three years (Section III).
Key analytical elements
- Definition and identification methodology (Section II)
- Sets out the definition of systemic importance used by staff.
- Describes the methodology for identifying members with systemically important financial sectors.
- Frequency rationale (Section III)
- Reviews academic literature and industry practices.
- Forms the basis for the staff proposal to conduct mandatory financial stability assessments at a frequency of about three years.
Summary findings and implications
- Core proposition:
- Make financial stability assessments under the FSAP mandatory for members with systemically important financial sectors.
- Analytical foundation:
- Combines a defined measure of systemic importance with a replicable methodology for identification (Section II).
- Relies on a literature and practice review to justify a roughly three-year assessment cycle (Section III).