Country Reports
2019
June 26, 2019
Switzerland: 2019 Article IV Consultation - Press Release; Staff Report; and Statement by the Executive Director for Switzerland
Description: The Swiss economy has performed relatively well since the global financial crisis. Growth compares favorably with most other advanced countries and aggregate employment has grown robustly. The fiscal position is strong and the external trade surplus remains large and stable despite several episodes of intense appreciation pressure owing to the Swiss franc’s reputation as a safe haven. Growth is expected to temporarily dip to 1.1 percent in 2019 on weakness in external demand. Risks to the outlook are tilted down. Switzerland is also facing several policy challenges: low interest rates are fueling risks in the real estate and mortgage markets; persistent subdued inflation has decreased the operational space for monetary policy; and population aging and technological change will require further upskilling and generate new demands for public resources.
June 26, 2019
Switzerland: Financial Sector Assessment Program; Technical Note-Stress Testing the Banking Sector
Description: Financial Sector Assessment Program; Technical Note-Stress Testing the Banking Sector
June 26, 2019
Switzerland: Financial Sector Assessment Program; Technical Note-Selected Issues on Banking Supervision
Description: Financial Sector Assessment Program; Technical Note-Selected Issues on Banking Supervision
June 26, 2019
Switzerland: Financial Sector Assessment Program; Technical Note-Regulation and Supervision of Asset Management Activities
Description: Financial Sector Assessment Program; Technical Note-Regulation and Supervision of Asset Management Activities
June 25, 2019
Denmark: 2019 Article IV Consultation - Press Release; Staff Report; and Statement by the Executive Director for Denmark
Description: The solid performance of the economy continues to be supported by domestic demand and labor market pressures are gradually building. The current account surplus is declining amid higher investment. The outlook is for continued growth with risks tilted to the downside. While overall house price growth has started to soften, elevated household debt remains a key source of risk. Banks are sound and profitable.
June 25, 2019
Denmark: Selected Issues
Description: Considering the Danske Bank case and in the context of a highly integrated Nordic-Baltic financial sector, this Selected Issues paper compares the money laundering (ML) threats and related supervisory vulnerabilities facing the region’s largest economies, highlights Denmark’s ongoing efforts to address those vulnerabilities, notes critical next steps, and provides recommendations aimed at maintaining the country’s current momentum for reform. The paper finds that Denmark has taken important steps to strengthen its anti-money laundering and combating the financing of terrorism (AML/CFT) supervision over the last two years—including via amendments to the AML Act, a significant increase in supervisory resources, and a concomitant increase in on-site inspections—and that these steps represent relevant and necessary responses to the ML risks facing Denmark. The key is therefore to maintain and build on the momentum Denmark has already established. The skills of newly hired inspectors will take time to build, the elaboration of a comprehensive institutional risk assessment model and AML/CFT supervisory manual will take time to complete and strengthened working relationships with foreign counterparts will take time to establish and operationalize.
June 24, 2019
United States: 2019 Article IV Consultation - Press Release; Staff Report; and Statement by the Executive Director for the United States
Description: The U.S. economy is in the longest expansion in recorded history. Unemployment is at levels not seen since the late 1960s, real wages are rising, and inflationary pressures remain subdued. Economic activity, while still growing above potential, is expected to slow to around 2.6 percent this year and 1.9 percent in 2020.
June 24, 2019
Canada: Financial System Stability Assessment
Description: This Financial System Stability Assessment paper discusses that Canada has enjoyed favorable macroeconomic outcomes over the past decades, and its vibrant financial system continues to grow robustly. However, macrofinancial vulnerabilities—notably, elevated household debt and housing market imbalances—remain substantial, posing financial stability concerns. Various parts of the financial system are directly exposed to the housing market and/or linked through housing finance. The financial system would be able to manage severe macrofinancial shocks. Major deposit-taking institutions would remain resilient, but mortgage insurers would need additional capital in a severe adverse scenario. Housing finance is broadly resilient, notwithstanding some weaknesses in the small non-prime mortgage lending segment. Although banks’ overall capital buffers are adequate, additional required capital for mortgage exposures, along with measures to increase risk-based differentiation in mortgage pricing, would be desirable. This would help ensure adequate through-the cycle buffers, improve mortgage risk-pricing, and limit procyclical effects induced by housing market corrections.
June 24, 2019
Canada: 2019 Article IV Consultation - Press Release; and Staff Report
Description: Growth has slowed to a more sustainable level and financial vulnerabilities have eased. But risks remain. Household debt is high, the United States–Mexico–Canada Agreement (USMCA) awaits legislative approval, and ongoing trade tensions between the United States (U.S.) and its major trading partners are weighing on the global outlook.