Country Reports
2017
October 5, 2017
Sweden: Financial Sector Assessment Program-Technical Note-Stress Testing
Description: This Technical Note explains the stress testing approach of the 2016 Financial Sector Assessment Program in assessment of risk in the Swedish financial sector and provides the results of the tests. Stress tests covered three major segments of the domestic financial sector. The resilience of the Swedish banking system was tested against solvency, liquidity, and contagion risks. The solvency stress test suggests that banks would be resilient to severe economic distress. Bank liquidity stress tests suggest that banks could withstand severe funding and market liquidity shocks, but there are pockets of vulnerability. The overall stress testing exercise suggests that there is room for improvement in the individual components of authorities’ stress testing framework.
October 5, 2017
Sweden: Financial Sector Assessment Program-Technical Note-Supervision and Oversight of Financial Market Infrastructures
Description: This Technical Note discusses the findings and recommendations made in the Financial Sector Assessment Program for Sweden in the areas of supervision and oversight of financial market infrastructures (FMIs). FMIs in Sweden are subject to appropriate and effective supervision and oversight by the Finansinspektionen (Financial Supervisory Authority, FI) and Sveriges Riksbank (Riksbank). The scope, basis, and objectives of each authority’s supervision and oversight are clearly defined and disclosed. There is evidence that the authorities’ supervision and oversight have effectively improved risk management practices at Swedish FMIs. There is also effective cooperation between the FI and Riksbank in the supervision and oversight of FMIs. The risk management at Nasdaq Clearing appears to be sound.
October 5, 2017
Sweden: Financial Sector Assessment Program-Technical Note-Systemic Risk Oversight Framework and Management
Description: This Technical Note discusses the findings and recommendations made in the Financial Sector Assessment Program for Sweden in the areas of the systemic risk oversight framework and management. To promote accountability, the law should clarify the allocation of macroprudential powers between the government and the Finansinspektionen (Financial Supervisory Authority, FI) and grant the FI a clear legal mandate for macroprudential policy, with full operational independence. The Financial Stability Council, or a similar body—excluding the Ministry of Finance—should have the legal authority to issue recommendations, preferably with a “comply or explain” approach. The law should also ensure that the Sveriges Riksbank’s expertise in financial stability analysis finds a clear institutional role in the oversight of systemic risk.
October 5, 2017
Uganda: Technical Assistance Report-Report on Government Finance Statistics
Description: This Technical Assistance Report discusses technical advice and recommendations given by the IMF mission to the authorities of Uganda regarding compilation and dissemination of government finance statistics in accordance with the guidelines of Government Finance Statistics Manual 2001/14. The IMF mission, in collaboration with the Uganda Bureau of Statistics, the Bank of Uganda, and the Ministry of Finance, Planning, and Economic Development, produced a new institutional table that can be further reviewed, adopted, and used as a standard for the entire government of Uganda in the production of statistics. The IMF mission recommends that the government of Uganda continue to disseminate government finance statistics to the IMF and the East African Community and start disseminating a broader range of public sector debt statistics through the World Bank.
October 5, 2017
Uganda: Technical Assistance Report-Report on Government Finance Statistics
Description: This Technical Assistance Report discusses technical advice and recommendations given by the IMF mission to the authorities of Uganda regarding compilation and dissemination of government finance statistics and public sector debt statistics according to international standards. Automation of the collection of source data for extra-budgetary units and local governments is recommended, first through the use of data collection templates and second through incorporation of these institutional units into the Integrated Financial Management and Information System. Historical data on the stock of arrears and related repayments should also be provided to enable assessment of progress on reducing and clearing arrears.
October 5, 2017
Saudi Arabia: 2017 Article IV Consultation-Press Release; and Staff Report
Description: This 2017 Article IV Consultation highlights Saudi Arabia’s launch of a bold reform program under Vision 2030, announced in 2016. The authorities have made considerable progress in initiating the implementation of their ambitious reform agenda. Non-oil growth is projected to pick up to 1.7 percent in 2017. Growth is expected to strengthen over the medium term as structural reforms are implemented. Risks mainly come from uncertainties about future oil prices, as well as questions about how the ongoing reforms will affect the economy. Employment growth has weakened, and the unemployment rate among Saudi nationals has increased to 12.3 percent. The fiscal deficit is also projected to narrow substantially in the coming years.
October 5, 2017
Saudi Arabia: Selected Issues
Description: This Selected Issues paper looks at the appropriate scope and pace of fiscal adjustment in Saudi Arabia. The economy of Saudi Arabia has started to feel the impact of the fiscal adjustment. The fiscal space analysis suggests that the authorities have some space in the next few years to undertake a more gradual fiscal adjustment than set out in the IMF staff’s baseline. Although faster fiscal adjustment may have advantages in terms of limiting the rundown in net assets and taking full advantage of the current pro-reform climate, it has disadvantages when it comes to the larger impact on growth and employment in the near term, which may ultimately undermine the sustainability of the reforms.
October 5, 2017
Saudi Arabia: Financial System Stability Assessment
Description: This paper assesses the stability of Saudi Arabia’s financial system as a whole. Banks—the core of the Saudi financial system—remain liquid and resilient. Stress tests show that most banks, including all systemically important banks, would be able to continue operating and meeting regulatory capital requirements in the event of additional severe economic shocks, characterized by oil prices falling substantially below current levels. Despite the recent liquidity challenges, all banks would also be able to cope with additional adverse liquidity shocks. The authorities’ ambitious agenda for improving macro- and microprudential financial sector oversight should be fully implemented and, in some cases, enhanced and further refined.
October 5, 2017
Sweden: Financial Sector Assessment Program-Technical Note- Banking Regulation and Supervision
Description: This Technical Note evaluates banking regulation and supervision in Sweden. The Finansinspektionen (Financial Supervisory Authority, FI) has made considerable progress developing supervisory approaches and techniques, particularly structured risk assessments for the four large banking groups. Concerns raised in the 2011 Financial Stability Assessment Program regarding insufficient granularity and frequency of reporting by supervised institutions has been addressed, starting in the third quarter of 2014. The FI has also implemented a new system for management of banking and insurance supervisory data. The IMF staff expressed satisfaction with the system’s functionality and flexibility to produce custom reports. The work to put in place a standardized set of internal screening and analytical reports, however, is ongoing.
October 5, 2017
Sweden: Financial Sector Assessment Program-Technical Note-Crisis Readiness, Management, and Resolution
Description: This Technical Note discusses the findings and recommendations in the Financial Sector Assessment Program (FSAP) for Sweden in the areas of financial safety net and crisis management arrangements. Since the 2011 FSAP, Sweden’s financial safety net and crisis management frameworks, including bank resolution and contingency planning, have improved. In response to the FSAP and the overhaul of pertinent EU rules, Sweden has enacted a host of new legislation, introduced a resolution regime for credit institutions and certain investment firms, and revised its deposit insurance system, allowing it to fund resolution measures. To ensure operational capacity to rapidly deploy recovery and resolution tools, further investments are needed to strengthen the safety net and crisis management frameworks.