How the Proposed Basel Guidelines on Rating-agency Assessments Would Affect Developing Countries PDF Download
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Author: Giovanni Ferri Publisher: World Bank Publications ISBN: Category : Bank Languages : en Pages : 36
Book Description
The Basel Committee has proposed linking capital asset requirements for banks to the banks' private sector ratings. Doing so would reduce the capital requirements for banks that lend prudently in high-income countries; the same incentives would not apply in developing countries.
Author: Giovanni Ferri Publisher: World Bank Publications ISBN: Category : Bank Languages : en Pages : 36
Book Description
The Basel Committee has proposed linking capital asset requirements for banks to the banks' private sector ratings. Doing so would reduce the capital requirements for banks that lend prudently in high-income countries; the same incentives would not apply in developing countries.
Author: Caio Ferreira Publisher: International Monetary Fund ISBN: 1498320309 Category : Business & Economics Languages : en Pages : 42
Book Description
Developing economies can strengthen their financial systems by implementing the main elements of global regulatory reform. But to build an effective prudential framework, they may need to adapt international standards taking into account the sophistication and size of their financial institutions, the relevance of different financial operations in their market, the granularity of information available and the capacity of their supervisors. Under a proportionate application of the Basel standards, smaller institutions with less complex business models would be subject to a simpler regulatory framework that enhances the resilience of the financial sector without generating disproportionate compliance costs. This paper provides guidance on how non-Basel Committee member countries could incorporate banks’ capital and liquidity standards into their framework. It builds on the experience gained by the authors in the course of their work in providing technical assistance on—and assessing compliance with—international standards in banking supervision.
Author: Charles Albert Eric Goodhart Publisher: MIT Press ISBN: 9780262071673 Category : Business & Economics Languages : en Pages : 560
Book Description
As economic advisor to the Bank of England for many years, C. A. E. Goodhart is uniquely positioned to assess the role of the central bank in the modern financial system. This book brings together twenty-one of his previously published articles dealing with the changing functions of central banks over time, recent efforts to maintain price stability, and debates over specific financial regulation proposals in the UK. Although the current day-to-day operations of central banks are subject to continuous comment and frequent criticism, their structural role within the economic system as a whole has generally been accepted without much question, despite several attempts by economists in recent decades to challenge the value of the institution. C. A. E. Goodhart brings his knowledge of both the theoretical arguments and the actual working of central banks to bear in these essays. Part I looks at the general purposes and functions of central banks within the financial system and their evolution over time. Part II concentrates on the current objectives and operations of central banks, and the maintenance of price stability in particular. Part III analyzes the broader issues of financial regulation.
Author: Giovanni Majnoni Publisher: ISBN: Category : Languages : en Pages : 32
Book Description
The Basel Committee has proposed linking capital asset requirements for banks to the banks' private sector ratings. Doing so would reduce the capital requirements for banks that lend prudently in high-income countries; the same incentives would not apply in developing countries. Using historical data on sovereign and individual borrowers, Ferri, Liu, and Majnoni assess the potential impact on non-high-income countries of linking capital asset requirements for banks to private sector ratings, as the Basel Committee has proposed.They show that linking banks' capital asset requirements to external ratings would have undesirable effects for developing countries. First, ratings of banks and corporations in developing countries are less common, so capital asset requirements would be practically insensitive to improvements in the quality of assets - widening the gap between banks of equal financial strength in higher- and lower-income countries.Second, bank and corporate ratings in developing countries (unlike their counterparts in high-income countries) are strongly linked to the sovereign ratings for the country - and appear to be strongly related (asymmetrically) to changes in the sovereign ratings. A sovereign downgrading would bring greater changes in capital allocations than an upgrading, and would call for larger capital requirements at the very time access to capital markets was more difficult.Under the new guidelines, capital requirements in developing countries would thus be exposed to the cyclical swings associated with the revision of sovereign ratings in recent crises.Ultimately, linking banks' capital asset requirements to private sector ratings would reduce the credit available to non-high-income countries and make it more costly, limiting economic activity. Bank capital needs in developing countries would be more volatile than those in high-income countries.These findings suggest that the Basel Committee should reassess the role it proposes assigning to external ratings, to minimize the detrimental impact of the regulatory use of such ratings on developing countries. This paper - a product of the Financial Sector Strategy and Policy Department - is part of a larger effort in the department to study the impact of financial regulation on economic development. The authors may be contacted at [email protected] or [email protected].
Author: Vanessa Le Leslé Publisher: International Monetary Fund ISBN: 1475502656 Category : Business & Economics Languages : en Pages : 50
Book Description
In this paper, we provide an overview of the concerns surrounding the variations in the calculation of risk-weighted assets (RWAs) across banks and jurisdictions and how this might undermine the Basel III capital adequacy framework. We discuss the key drivers behind the differences in these calculations, drawing upon a sample of systemically important banks from Europe, North America, and Asia Pacific. We then discuss a range of policy options that could be explored to fix the actual and perceived problems with RWAs, and improve the use of risk-sensitive capital ratios.
Author: Mr.Andre Santos Publisher: International Monetary Fund ISBN: 147551008X Category : Business & Economics Languages : en Pages : 43
Book Description
Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.
Author: Marcelo Giugale Publisher: World Bank Publications ISBN: Category : Bank Languages : en Pages : 30
Book Description
To bring fiscal discipline to state and municipal governments, Mexico's federal government has established a two-pillar framework that explicitly renounces federal bail-outs and establishes a Basel - consistent link between the capital-risk weighting of bank loans to subnational governments and the borrower's credit rating. Whether the framework succeeds will depend partly on market assessments of the government's commitment to enforce bank capital rules and refrain from bailing out defaulting subnational governments.
Author: Aaditya Mattoo Publisher: ISBN: Category : Electronic commerce Languages : en Pages : 48
Book Description
Mattoo and Subramanian argue that India should engage more actively in the multilateral trading system, to help facilitate and consolidate domestic reform and to gain access to export markets for India's goods and services.
Author: Giovanni Ferri
Author: Giovanni Ferri
Author: 
Author: Caio Ferreira
Author: Charles Albert Eric Goodhart
Author: Giovanni Majnoni
Author: Vanessa Le Leslé
Author: Mr.Andre Santos
Author: Marcelo Giugale
Author: 
Author: Aaditya Mattoo