Author : International Monetary
Publisher : International Monetary Fund
Page : 108 pages
File Size : 14,77 MB
Release : 2021-06-15
Category : Business & Economics
ISBN : 151357325X
Hong Kong SAR (HKSAR) is a small and open economy, and a major international financial center with extensive linkages to Mainland China. Over the past two years, Hong Kong SAR’s economy and financial sector were adversely impacted by domestic social unrest, US-China tensions, and the global COVID-19 pandemic, resulting in an unprecedented two consecutive years of negative economic growth.
Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 127 pages
File Size : 11,6 MB
Release : 2014-07-16
Category : Business & Economics
ISBN : 1498322638
This Technical Note on Stress Testing the Banking Supervision was prepared in the context of the Financial Sector Assessment Program (FSAP) for the People’s Republic of China–Hong Kong Special Administrative Region (HKSAR). Bank liquidity tests focus on sudden, sizable withdrawals of funding and the sufficiency of existing assets to withstand those shocks under stressed conditions. The stress test results confirm a high degree of resilience of the sector. This reflects the strength of the banks at the starting position, which reduces their fundamental vulnerability to shocks. Banks in HKSAR hold very high levels of capital, are very profitable, and have a low level of asset impairments amid stable funding profiles. The Hong Kong Monetary Authority is encouraged to continue its integration of risk-based supervision in the development of stress test scenarios for macroprudential policy and surveillance. Banking supervisors routinely conduct stress tests and, from time to time, modify relevant assumptions in order to support thematic reviews of identified vulnerabilities against emerging risks.
Author : International Monetary
Publisher : International Monetary Fund
Page : 45 pages
File Size : 50,83 MB
Release : 2021-06-15
Category : Business & Economics
ISBN : 1513573284
The institutional framework for Macroprudential Policies (MaPP) in the Hong Kong Special Administrative Region (the Hong Kong SAR) is well established. According to the Basic Law, the Government of the Hong Kong SAR shall on its own formulate monetary and financial policies. The Financial Secretary (FS) and the Secretary for Financial Services and the Treasury (SFST) are responsible for policies for maintaining the stability and integrity of the financial system of the Hong Kong SAR. The Hong Kong SAR has a sector-based regulatory structure and the responsibilities and tools for safeguarding financial stability are spread across the Financial Services and the Treasury Bureau (FSTB) and three regulators (namely, the Hong Kong Monetary Authority (HKMA), Securities and Futures Commission (SFC) and Insurance Authority (IA)). There are good and well-structured interagency coordination and consultation mechanisms, through the Council of Financial Regulators (CFR) and the Financial Stability Committee (FSC), chaired by the FS and the SFST, respectively. Broad coordination between the CFR and government agencies on taxation and housing supply-side policies has also worked well. MaPP and risk assessment are communicated to the public openly and frequently through speeches, press releases and regular publications, including the Half-Yearly Monetary and Financial Stability Report of the HKMA and the Half-yearly Review Report of the Global and Local Securities Markets of the SFC.
Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 44 pages
File Size : 31,15 MB
Release : 2014-05-22
Category : Business & Economics
ISBN : 1498313213
This Financial System Stability Assessment report on Hong Kong Special Administrative Region (HKSAR) highlights that HKSAR’s financial sector is very well regulated, with the capacity to withstand a diversity of shocks. The sector, however, faces major risks, which puts a significant premium on effective liquidity management, macroprudential oversight, and microprudential supervision. The regulation and supervision framework of the financial sector is of a high caliber, and displays a high level of compliance with international standards, but there remains scope for further strengthening. Financial market infrastructures are highly sophisticated, but further enhancements are needed to fully comply with new international standards.
Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 44 pages
File Size : 34,91 MB
Release : 2014-05-22
Category : Business & Economics
ISBN : 1498306705
This Financial System Stability Assessment report on Hong Kong Special Administrative Region (HKSAR) highlights that HKSAR’s financial sector is very well regulated, with the capacity to withstand a diversity of shocks. The sector, however, faces major risks, which puts a significant premium on effective liquidity management, macroprudential oversight, and microprudential supervision. The regulation and supervision framework of the financial sector is of a high caliber, and displays a high level of compliance with international standards, but there remains scope for further strengthening. Financial market infrastructures are highly sophisticated, but further enhancements are needed to fully comply with new international standards.
Author : Mr.Tobias Adrian
Publisher : International Monetary Fund
Page : 73 pages
File Size : 45,91 MB
Release : 2020-02-05
Category : Business & Economics
ISBN : 1513520741
This paper explains specifics of stress testing at the IMF. After a brief section on the evolution of stress tests at the IMF, the paper presents the key steps of an IMF staff stress test. They are followed by a discussion on how IMF staff uses stress tests results for policy advice. The paper concludes by identifying remaining challenges to make stress tests more useful for the monitoring of financial stability and an overview of IMF staff work program in that direction. Stress tests help assess the resilience of financial systems in IMF member countries and underpin policy advice to preserve or restore financial stability. This assessment and advice are mainly provided through the Financial Sector Assessment Program (FSAP). IMF staff also provide technical assistance in stress testing to many its member countries. An IMF macroprudential stress test is a methodology to assess financial vulnerabilities that can trigger systemic risk and the need of systemwide mitigating measures. The definition of systemic risk as used by the IMF is relevant to understanding the role of its stress tests as tools for financial surveillance and the IMF’s current work program. IMF stress tests primarily apply to depository intermediaries, and, systemically important banks.
Author : International Monetary
Publisher : International Monetary Fund
Page : 66 pages
File Size : 37,65 MB
Release : 2021-06-08
Category : Business & Economics
ISBN : 1513573101
The main macro-financial risks relate to extensive linkages to Mainland China, stretched real estate valuations, and exposure to shifts in global market and domestic risk sentiment, compounded by escalating U.S.-China tensions. Stress tests show that the financial system is resilient to severe macro-financial shocks, but there are pockets of vulnerabilities in foreign bank branches, investment funds, households, and nonfinancial corporates. Hong Kong SAR’s financial sector is also exposed to physical and transition risks from climate change.
Author : Mr.Dimitri G. Demekas
Publisher : International Monetary Fund
Page : 34 pages
File Size : 45,29 MB
Release : 2015-06-30
Category : Business & Economics
ISBN : 1513501534
Giving stress tests a macroprudential perspective requires (i) incorporating general equilibrium dimensions, so that the outcome of the test depends not only on the size of the shock and the buffers of individual institutions but also on their behavioral responses and their interactions with each other and with other economic agents; and (ii) focusing on the resilience of the system as a whole. Progress has been made toward the first goal: several models are now available that attempt to integrate solvency, liquidity, and other sources of risk and to capture some behavioral responses and feedback effects. But building models that measure correctly systemic risk and the contribution of individual institutions to it while, at the same time, relating the results to the established regulatory framework has proved more difficult. Looking forward, making macroprudential stress tests more effective would entail using a variety of analytical approaches and scenarios, integrating non-bank financial entities, and exploring the use of agent-based models. As well, macroprudential stress tests should not be used in isolation but be treated as complements to other tools and—crucially—be combined with microprudential perspectives.
Author : International Monetary
Publisher : International Monetary Fund
Page : 29 pages
File Size : 11,95 MB
Release : 2021-06-15
Category : Business & Economics
ISBN : 1513584332
The Hong Kong Special Administrative Regime (HKSAR) is home to a fast-growing and highly international investment fund industry. The public investment fund industry authorized in HKSAR has grown rapidly from US$628 billion in 2008 to US$1.6 trillion in net asset value (NAV) in 2020. The locally domiciled sector grew from US$121 billion in early 2015 to almost US$155 billion in 2020. Open-end funds authorized for sale in HKSAR are substantially invested in foreign assets and significantly invested in by non-HKSAR residents and are therefore reactive to international liquidity and price conditions. Locally domiciled funds invest their portfolios in both local and overseas assets markets, while they are overwhelmingly funded by HKSAR investors.
Author : Morris Goldstein
Publisher : Columbia University Press
Page : 369 pages
File Size : 20,55 MB
Release : 2017-05-30
Category : Business & Economics
ISBN : 0881327069
Spurred by the success of the first stress test of US banks toward the end of the global economic crisis in 2009, stress testing of large financial institutions has become the cornerstone of banking supervision worldwide. The aim of the tests is to determine which banks are adequately capitalized under severe economic shocks and to order corrective measures for those that are vulnerable. In Banking’s Final Exam, one of the world’s leading experts on banking regulation concludes that the tests administered on both sides of the Atlantic suffer from fundamental weaknesses, leading to a false sense of reassurance about the safety and soundness of the banking system. Some weaknesses can be corrected within the existing bank-capital regime, but others will require bold reforms—including higher minimum capital requirements for the largest and most systemically-important banks. The banking industry is likely to resist these reforms, but this book explains why their objections do not hold water.
