Press Release No. <a name="P16_75"></a>03/45

Press Release: IMF Invites Public Comment on Latest Draft Compilation Guide on Financial Soundness Indicators

April 1, 2003


    The International Monetary Fund's Statistics Department has opened for public comment through June 20, 2003 the latest draft Compilation Guide on Financial Soundness Indicators, which has been prepared for the purpose of supporting countries in their efforts to develop stronger and more effective financial sectors.

    Financial Soundness Indicators have been developed to complement other initiatives underway to strengthen the global financial system, including the joint IMF-World Bank Financial Sector Assessment Program that was launched in 1999.

    The Guide provides guidance to the IMF's 184-member countries on the concepts and definitions, data sources, and techniques, for compiling and disseminating a list of "core" and "encouraged" Financial Soundness Indicators (see Annex). The Guide also defines the types of financial institutions; sets out detailed accounting rules, including valuation of instruments, and provides conceptual advice on individual line items in the income and expense and balance sheet accounts that can be used to calculate many of the Indicators.

    Experts from international statistical organizations, standards setting bodies, and IMF member countries, commented on an earlier draft of the Guide, which also explains approaches to the aggregation and consolidation of data, gives practical advice on compiling and analyzing peer group data, and provides guidance on measuring real estate prices and certain financial market information.

    Comments on the latest draft Guide may be sent to the IMF's Statistics Department via email: staf2fsi@imf.org, or by facsimile: [1] 202-623-5411. Written comments may be addressed to: Director, Statistics Department, International Monetary Fund, 700 19th Street NW, Washington DC 20431.



    ANNEX

    Financial Soundness Indicators: The Core and Encouraged Sets

    Core Set

    Deposit-takers

    		  

      Capital adequacy

    Regulatory capital to risk-weighted assets
    Regulatory Tier I capital to risk-weighted assets

      Asset quality

    Nonperforming loans to total gross loans
    Nonperforming loans net of provisions to capital
    Sectoral distribution of loans to total loans
    Large exposures to capital

      Earnings and profitability

    Return on assets
    Return on equity
    Interest margin to gross income
    Noninterest expenses to gross income

      Liquidity

    Liquid assets to total assets (liquid asset ratio)
    Liquid assets to short-term liabilities

      Sensitivity to market risk

    Duration of assets
    Duration of liabilities
    Net open position in foreign exchange to capital

    Encouraged Set

    Deposit-takers

    Capital to assets
    Geographical distribution of loans to total loans
    Gross asset position in financial derivatives to capital
    Gross liability position in financial derivatives to capital
    Trading income to total income
    Personnel expenses to noninterest expenses
    Spread between reference lending and deposit rates
    Spread between highest and lowest interbank rate
    Customer deposits to total (non-interbank) loans
    Foreign currency-denominated loans to total loans
    Foreign currency-denominated liabilities to total liabilities
    Net open position in equities to capital

    Other financial corporations

    Assets to total financial system assets
    Assets to GDP

    Nonfinancial corporate sector

    Total debt to equity
    Return on equity
    Earnings to interest and principal expenses
    Net foreign exchange exposure to equity
    Number of applications for protection from creditors

    Households

    Household debt to GDP

    Household debt service and principal payments to income

    Market liquidity

    Average bid-ask spread in the securities market 1/
    Average daily turnover ratio in the securities market 1/

    Real estate markets

    Real estate prices
    Residential real estate loans to total loans
    Commercial real estate loans to total loans

    1/ Or in other markets that are most relevant to bank liquidity, such as foreign exchange markets.





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