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Topics. Where we are Origins and evolution Development of FSI Project Regular reporting of FSIs Dissemination and Uses of FSIs Where we go Enhanced impetus given to FSIs as part of G-20 decisions Future work program FSI Reference Group meeting . Background/Motivation for FSIs (1).

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  1. Topics Where we are Origins and evolution Development of FSI Project Regular reporting of FSIs Dissemination and Uses of FSIs Where we go Enhanced impetus given to FSIs as part of G-20 decisions Future work program FSI Reference Group meeting Statistics Department
  2. Background/Motivation for FSIs (1) Global recession of late 1980’s and early 1990’s International financial institutions and countries began monitoring financial market variables IMF’s 1996 Study on Financial Soundness and Macroeconomic Policy 1997 financial crises Statistics Department
  3. Background/Motivation for FSIs (2) Responding to financial crises by the IMF Launch of Financial Sector Assessment Program (FSAP) with the World Bank Conduct of Quarterly Vulnerability Analysis Introduction of Global Financial Stability Report Statistics Department
  4. Background/Motivation for FSIs (3) Responding to financial crises by the IMF On front of statistics Introduction of International reserves and foreign currency liquidity template External debt statistics guide Survey of macroprudential indicators used by countries Development of Financial Soundness Indicators (FSIs) Statistics Department
  5. Background/Motivation for FSIs (4) Data/information gap has hindered the effective assessment of financial sector soundness Existing macro statistics do not provide sufficient information Use of inadequate methodology to compile indicators Inability to compare data inconsistent methodologies absence of metadata for differently compiled data Development of FSIs and specific FSI methodology documented (if there is deviation from it) in metadata aims to close or narrow this gap Statistics Department
  6. Development of FSIs (1) Launched by a conference of experts in 1999 A survey of member countries in 2000 IMF Board’s endorsement of a list of FSIs in 2001 Drafting the Compilation Guide in 2002-2004 Collecting and incorporating comments by public and experts into the Draft Compilation Guide Statistics Department
  7. Developments of FSIs (2) –The Core Set Statistics Department
  8. Development of FSIs (3) –Encouraged set Statistics Department
  9. Development of FSIs (4) –Encouraged set Statistics Department
  10. Development of FSIs (5) Outreach seminars for the Guide Finalization of the Guide and IMF Board’s endorsement of the Guide in July 2004; IMF published the Guide in March 2006 Implementation phase began in 2004 with the launch of the coordinated compilation exercise (CCE) 62 countries agreed to participate FSI data and metadata compiled for 2005 Compilation Guide used as reference point for the CCE Standard FSI templates used for data collection FSI data and metadata for the CCE for 52 countries posted on FSI website in early 2007 Outcomes of CCE IMF Board endorsement of post-CCE work Amendments to FSI Compilation Guide Statistics Department
  11. Regular Reporting of FSIs (1) Creation in first half of 2008 of new FSI Template incorporating lessons of CCE and reflecting amended FSI methodology Piloting of new FSI Template by four countries, and comments on the Template by CCE countries and collaborating international agencies (June-October 2008) Invitation to CCE countries to begin regular reporting of FSIs to the IMF (September 2008) Preparation for regular reporting to the IMF by 52 CCE countries (November 2008-June 2009) and dissemination of FSI data of IMF’s website. Statistics Department
  12. Regular Reporting of FSIs (2) Redesign of reporting format Significant streamlining of previous templates Utilize as much as possible the experience and lessons learned from the CCE and the regular reporting of FSIs Main features of the new templates Time series in one submission Maximum automation of data and metadata entering and processing with a view to alleviating reporting burden Built-in data/metadata validation (e.g., blocking irrelevant cells, calculating ratios, etc.) Enhanced capacity for data/metadata query with a view to facilitating cross-country comparisons Statistics Department
  13. Regular Reporting of FSIs (3) Current focus of FSI data reporting Expansion of country coverage Current FSI reporters: 75 All current non-FSI participating countries have been invited to commence regular reporting to the IMF Expansion of historical data CCE covers data for 2005 only Most regular reporters have provided data from 2008 onward Some FSI reporters have provided longer historical data Higher frequency of data Quarterly—recommended Monthly—strongly encouraged Annual—acceptable, with quarterly objective viewed as important objective Broader coverage of reported FSIs Core and encouraged to the extent possible Statistics Department
  14. FSIs: Dissemination and Uses (1) FSIs Dissemination First public release of regularly reported data on IMF’s website in July 2009 Launch concentrated excessively on metadata Revised FSI website launched at end-November 2009: Greater focus on data dissemination Friendliness of data disseminated Cross-country and regional tables Data are currently available for 75 countries Of which, 11 are countries in the Latin American region Statistics Department
  15. FSIs: Dissemination and Uses (2) FSIs reported by countries are posted at IMF website (http://www.imf.org/external/data.htm) Individual countries pages FSI data table FSI metadata FSM–Metadata table FS1–Information on financial sector structure FS2–Financial statements (income statement, B/S, etc.) Cross-country data tables All countries By region—AFR, APD, EUR, EUR, WHD G-20, OECD, Emerging and Developing Countries Statistics Department
  16. FSIs: Dissemination and Uses (3) FSIs in Global Financial Stability Report (GFSR) Introduced in 2002 as one of several IMF initiatives in response to financial crises in 1990s and early 2000s Provides assessment of the global financial system & markets Addresses emerging market financing in a global context Focuses on current market conditions Contains analytical chapters or essays on structural or systemic issues relevant to international financial stability Published on a semi-annual basis (April, October) Publishes selected FSIs in its Statistical Appendix Integration of FSIs in GFSR with IMF Overall FSI project Statistics Department
  17. FSIs: Dissemination and Uses (4) (6) FSIs in GFSR Regulatory Capital to Risk-Weighted Assets Capital to Assets Provisions to Nonperforming Loans Nonperforming Loans to Total Loans Return on Assets Return on Equity Statistics Department
  18. FSIs: Dissemination and Uses (5) FSIs for Inclusion in SDDS Periodic review of Data Standards Initiatives 7th review in December 2008 Staff instructed by the Board to return with proposal for inclusion of selected financial indicators in the SDDS Follow-up meeting with the Board in March 2010 Proposals to strengthen the SDDS with regard to financial indicators Seven FSIs—a new data category in SDDS Quarterly IIP The IMF Executive Board approved the inclusion into the SDDS of seven FSIs with quarterly periodicity on an encouraged basis Statistics Department
  19. FSIs: Dissemination and Uses (6) (7) FSIs in SDDS Regulatory Tier 1 Capital to Risk-Weighted Assets Regulatory Tier 1 Capital to Assets Nonperforming Loans Net of Provisions to Capital Nonperforming Loans to Total Gross Loans Return on Assets Liquid Assets to Short-Term Liabilities Net Open Position in Foreign Exchange to Capital Statistics Department
  20. FSIs: Dissemination and Uses (7) FSIs and Macroprudential Analysis FSIs are only one of the inputs that go into macroprudential analysis They are to be used together with Stress testing (FSAP) Information on financial infrastructure Information on the effectiveness of supervision Information on market functioning Information on the bank safety net Information on monetary operations Statistics Department
  21. FSIs: Dissemination and Uses (8) Peer group FSIs for identifying vulnerabilities below the sector level FSIs are systemic indicators Vulnerabilities of some institutions could be hidden in sector-level FSIs Descriptive statistics—measures of dispersion and concentration of ratios of individual institutions can also be used to identify vulnerabilities Also FSIs can be compiled for peer groups A peer group is a set of individual institutions that are grouped on the basis of analytically relevant criteria and can be used to compare: Individual deposit takers' ratios with FSIs of groups of similar institutions Peer groups with other domestic peer groups Peer groups across countries Statistics Department
  22. Enhanced Impetus Given to FSIs as Part of G-20 Decisions In November 2009, the G-20 finance ministers and central bank governors endorsed 20 recommendations to address information gaps described in a report prepared by the FSB Secretariat and the IMF staff — “The Financial Crisis and Information Gaps” The 20 recommendations address issues related to Monitoring risk in the financial sector International network connections Sectoral and other financial and economics datasets Communication of official statistics Recommendation #2 relates to FSIs Statistics Department
  23. Recommendation #2 (Under Monitoring Risk in the Financial Sector) Recommendation 2:(Lead agency: IMF) Increase the number of countries disseminating Financial Soundness Indicators (FSIs) Improve the FSI website and encourage quarterly data reporting Review FSI list and methodology Statistics Department
  24. FSI Work Program Lead agency: IMF Concrete plan—actions endorsed by the IMF Board in November 2007 Encourage countries to report FSIs to the IMF on a regular basis Create a centralized FSI database and use FSIs for surveillance and other work in IMF Include FSIs in the Special Data Dissemination Standard Refine the list of FSIs and improve cross-country comparability of FSIs Statistics Department
  25. Going Forward (1) Improve the FSI templates, database, website Request remaining G-20 countries and encourage more countries to report FSIs to STA Continue to provide training courses on FSIs to national data compilers Encourage the reporting of time series FSIs and improve data frequency Review FSI list and methodology FSI reference Group (FSIRG) meeting organized by the IMF during November 15-16, 2011 Statistics Department
  26. Going Forward (2) The FSIRG meeting discussed issues relating to Deposit takers (Basel III implications on FSIs) Nonfinancial corporation, households, and real estate markets Other financial corporations (subsectors FSIs) Improving frequency and timeliness of reporting Improving cross-country comparability (consolidation basis) Review of the list of core and encourage d FSIs The FSIRG meeting reached conclusions, which will also be the basis for a revised FSI Compilation Guide, which is scheduled for completion by around end of 2013 The Summary of Key Points and Conclusions of the FSIRG meeting is posted on IMF website at http://www.imf.org/external/data.htm Statistics Department
  27. Thank You! Statistics Department
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