› › Review Of The Institutional View On The Liberalization And Management Of Capital Flows Background Note On Assessing Systemic Financial Stability Risks Due To Fx Mismatches

Review of The Institutional View on The Liberalization and Management of Capital Flows

Author : International Monetary Fund

Publisher : International Monetary Fund

Page : 98 pages

File Size : 12,95 MB

Release : 2022-03-30

Category : Business & Economics

ISBN :

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Book Description

The Institutional View (IV) on the Liberalization and Management of Capital Flows, adopted in 2012, provides the basis for consistent advice, and where relevant, assessments on policies related to capital flows. This paper reviews the IV, informed by advances in research, notably the work on an Integrated Policy Framework (IPF), the findings of the 2020 evaluation by the Independent Evaluation Office (IEO) on IMF Advice on Capital Flows, and staff’s experience with the implementation of the IV. The core premises and objectives of the IV remain unchanged. The IV rests on the premises that capital flows are desirable as they can bring substantial benefits for countries, and that capital flow management measures (CFMs) can be useful in certain circumstances but should not substitute for warranted macroeconomic adjustment. With those premises in mind, the IV aims to help countries reap the benefits of capital flows, while managing the associated risks in a way that preserves macroeconomic and financial stability and does not generate significant negative outward spillovers.



Review of The Institutional View on The Liberalization and Management of Capital Flows — Background Note on Assessing Systemic Financial Stability Risks Due to FX Mismatches

Author : International Monetary Fund

Publisher : International Monetary Fund

Page : 18 pages

File Size : 32,20 MB

Release : 2022-03-30

Category : Business & Economics

ISBN :

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Book Description

This note outlines the approach of the proposed revision to the Institutional View (IV) when assessing whether systemic financial stability risks are elevated due to foreign currency (FX) mismatches. The approach builds on the staff guidance regarding risk assessments in bilateral surveillance, while allowing for flexibility to draw on future advances in best practice. This note proposes a two-step approach to assess systemic risks from FX mismatches. This note is organized as follows. Section II outlines the sources of systemic risks stemming from FX debt and potential amplification channels. Section III outlines the risk assessment approach in practice and Section IV concludes.



Staff Guidance Note on Macroprudential Policy

Author : International Monetary Fund

Publisher : International Monetary Fund

Page : 45 pages

File Size : 34,10 MB

Release : 2014-06-11

Category : Business & Economics

ISBN : 1498342620

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Book Description

This note provides guidance to facilitate the staff’s advice on macroprudential policy in Fund surveillance. It elaborates on the principles set out in the “Key Aspects of Macroprudential Policy,” taking into account the work of international standard setters as well as the evolving country experience with macroprudential policy. The main note is accompanied by supplements offering Detailed Guidance on Instruments and Considerations for Low Income Countries



Integrated Policy Framework—Principles for the Use of Foreign Exchange Intervention

Author : International Monetary Fund. Monetary and Capital Markets Department

Publisher : International Monetary Fund

Page : 61 pages

File Size : 43,1 MB

Release : 2023-12-21

Category : Business & Economics

ISBN :

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Book Description

This note guides policy advice on the use of foreign exchange intervention (FXI) as part of the Integrated Policy Framework (IPF) in Fund surveillance. The note provides general principles for the advice in countries with flexible exchange rates and sets out three use cases for FXI that are tied to specific frictions. It explores the use of FXI as part of an overall policy response, allowing the advice to differ with shocks, frictions, and country-specific circumstances.



Systemwide Liquidity Stress Testing Tool

Author : Ms. Hiroko Oura

Publisher : International Monetary Fund

Page : 54 pages

File Size : 25,50 MB

Release : 2022-12-16

Category : Business & Economics

ISBN :

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Book Description

Developing a systemic liquidity stress testing tool is challenging due to data constraints and hard-to-model behavioral factors. There has yet to be a uniformly accepted model partly because the nature of systemic liquidity risks differs significantly across countries. This paper offers a simple Excel-based tool to assess the high-level impact of aggregate liquidity stress on the whole economy and gauge its spillover across banks, non-bank financial institutions (NBFIs), and non-financial economic sectors. It primarily uses the balance sheet approach (BSA) data—a sector-aggregate matrix of financial exposure by counterpart—that have become increasingly available for various economies with all income levels. The results can identify systemically important financial linkages to be analyzed further and help calibrate macroprudential measures and a liquidity support framework. When liquidity stress stems from capital outflows, the tool can enrich policy discussion based on integrated policy framework (IPF) and international reserve adequacy perspectives.



Toward an Integrated Policy Framework

Author : International Monetary Fund

Publisher : INTERNATIONAL MONETARY FUND

Page : 54 pages

File Size : 32,56 MB

Release : 2020-10-08

Category : Business & Economics

ISBN : 9781513558769

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Book Description

Policymakers often face difficult tradeoffs in pursuing domestic and external stabilization objectives. The paper reflects staff’s work to advance the understanding of the policy options and tradeoffs available to policymakers in a systematic and analytical way. The paper recognizes that the optimal path of the IPF tools depends on structural characteristics and fiscal policies. The operational implications of IPF findings require careful consideration. Developing safeguards to minimize the risk of inappropriate use of IPF policies will be essential. Staff remains guided by the Fund’s Institutional View (IV) on the Liberalization and Management of Capital Flows.



Capital Flows - Review of Experience with the Institutional View

Author : International Monetary Fund. Legal Dept.

Publisher : International Monetary Fund

Page : 61 pages

File Size : 33,12 MB

Release : 2016-07-11

Category : Business & Economics

ISBN : 1498345050

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Book Description

Capital flows are an important aspect of the international monetary system. They provide significant benefits, both direct and indirect. At the same time, they also carry risks, and a key challenge for countries is how to harness the benefits while managing the risks. The institutional view on the liberalization and management of capital flows provides the Fund with a basis for consistent advice on policies related to capital flows. This paper reviews countries’ experiences with handling capital flows in the period since the adoption of the IMF’s institutional view in 2012. Based on the experience, it identifies a few areas in which the view would benefit from further clarification or elaboration.



Key Aspects of Macroprudential Policy - Background Paper

Author : International Monetary Fund. Fiscal Affairs Dept.

Publisher : International Monetary Fund

Page : 64 pages

File Size : 31,42 MB

Release : 2013-10-06

Category : Business & Economics

ISBN : 1498341713

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Book Description

The countercyclical capital buffer (CCB) was proposed by the Basel committee to increase the resilience of the banking sector to negative shocks. The interactions between banking sector losses and the real economy highlight the importance of building a capital buffer in periods when systemic risks are rising. Basel III introduces a framework for a time-varying capital buffer on top of the minimum capital requirement and another time-invariant buffer (the conservation buffer). The CCB aims to make banks more resilient against imbalances in credit markets and thereby enhance medium-term prospects of the economy—in good times when system-wide risks are growing, the regulators could impose the CCB which would help the banks to withstand losses in bad times.



Global Waves of Debt

Author : M. Ayhan Kose

Publisher : World Bank Publications

Page : 403 pages

File Size : 43,36 MB

Release : 2021-03-03

Category : Business & Economics

ISBN : 1464815453

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Book Description

The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.



Financial Stability Analysis: What are the Data Needs?

Author : Mr.Robert M Heath

Publisher : International Monetary Fund

Page : 64 pages

File Size : 35,51 MB

Release : 2017-07-10

Category : Business & Economics

ISBN : 1484308883

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Book Description

The growing incidences of financial crises and their damage to the economy has led policy makers to sharpen the focus on financial stability analysis (FSA), crisis prevention and management over the past 10–15 years. The statistical world has reacted with a number of initiatives, but does more need to be done? Taking a holistic view, based on a review of experiences of policy makers and analysts, this paper identifies common international threads in the data needed for FSA and suggests ways to address these. While there has been an encouragingly constructive response by statisticians, not least through the G-20 Data Gaps Initiative, more work is needed, including with regard to shadow banking, capital flows, corporate borrowing, and granular data. Further, to support FSA, the paper identifies potential enhancements to the conceptual advice in statistical manuals including with regard to foreign currency and remaining maturity.