Country Reports
2014
March 12, 2014
Bolivia: Fiscal Transparency Assessment
Description: This paper elaborates Bolivia’s fiscal transparency assessment report. The purpose of this IMF report is to facilitate countries in analyzing the fiscal situation through the appropriate basic, good, and advanced practices to identify which areas might benefit from reforms. These reforms intend to improve the coverage, opportunity, and quality of the macrofiscal information. The IMF report suggests that the issues merited improvements are related to the nonpreparation of audited annual consolidated financial statements of the central government and the absence of estimates and reports on tax expenditure.
Notes: Also Available in Spanish
March 12, 2014
Belgium: Staff Report for the 2014 Article IV Consultation
Description: The 2014 Article IV Consultation discusses economic developments and policies in Belgium. It highlights that despite its resilience, the Belgium economy has been losing competitiveness due to higher labor cost and lower productivity growths than peer countries. The government has taken measures to close the wage gap, but it is highlighted that the economy also needs to become more productive and adaptable through deeper product and labor market reforms. The supervisory and regulatory frameworks are being strengthened with a new draft banking law that restrains trading activities and improves the recovery and resolution framework.
March 10, 2014
Kenya: Poverty Reduction Strategy Paper-Joint Staff Advisory Note
Description: This Joint Staff Advisory Note focuses on the Poverty Reduction Strategy Paper (PRSP) for Kenya. Kenya’s second Medium Term Plan (MTP-2) that covers 2013–2017 seeks to build on the successes of the MTP1. It aims to accelerate growth to reach double-digit levels, to create jobs for the Kenyan youth, and to further reduce the still high poverty levels. It highlights that to reduce maternal mortality, the MTP-2 outlines measures such as free maternal healthcare at the point of delivery and incentives for school enrolment.
March 7, 2014
Canada: Financial Sector Assessment Program-Stress Testing-Technical Note
Description: This paper examines the stress testing module of the 2013 Financial Sector Assessment Program (FSAP) update for Canada. The IMF report highlights the three major segments of the domestic financial covered during the stress tests. The bank solvency stress tests suggest that while all banks would fall below the Canadian “all-in” Common Equity Tier 1 (CET1) supervisory threshold during severe economic distress, the resulting recapitalization needs are manageable. This IMF report provides recommendations for the Canadian authorities, derived from this joint exercise, to enhance the individual components of their stress testing framework.
March 7, 2014
Canada: Financial Sector Assessment Program-Crisis Management and Bank Resolution Framework-Technical Note
Description: This report underlies Canada’s Financial Sector Assessment Program (FSAP) in the areas of crisis management and blank resolution. The provincial deposit insurance systems (DIS) and resolution frameworks are highly heterogeneous and the FSAP’s analysis suggests that the preparedness to overcome financial stress should be enhanced. The IMF report discusses that the federal legal and institutional arrangements for resolving individual financial institutions are robust. It suggests that clear mandates should be assigned to: (1) monitor systematic risk to facilitate macroprudential oversight; and (2) carry out system wide crisis preparedness.
March 7, 2014
Canada: Financial Sector Assessment Program-Basel Core Principles for Effective Banking Supervision-Detailed Assessment of Observance
Description: This paper focuses on the IMF report on detailed assessment of observance of Basel Core Principles (BCP) for effective banking supervision in Canada. The Canadian banking supervisor (OSFI) adopts a close and cooperative approach that supports the close network of federal authorities in identifying and seeking to mitigate prudential risks to the federal system. As a world-leading regulator, OSFI could be expected to issue a comprehensive suite of risk management standards to be available to all banks, even if at a relatively high level or based largely on Basel Committee for Banking Supervision guidance.
March 7, 2014
Canada: Financial Sector Assessment Program-Impact on the Insurance Sector of a Low Interest Rate Environment-Technical Note
Description: This paper discusses Canada’s Financial Sector Assessment Program (FSAP) impact on the insurance sector of a low interest rate environment. It highlights that actuarial standards on valuation of liabilities require that assumed reinvestment rates take increasing account of current market rates that led to higher liabilities as low rates persisted. The note outlines the effect of Canadian accounting and actuarial standards that further increases in liabilities need to be recognized in the short term. Policy measures have been undertaken by Office of the Superintendent of Financial Institutions (OSFI) in the banking sector to address broader risks.
March 7, 2014
Canada: Financial Sector Assessment Program-Insurance Core Principles-Detailed Assessment of Observance
Description: This Detailed Assessment report, a part of the 2013 Financial Sector Assessment Program (FSAP) of Canada, assesses Canada’s regulatory regime and supervisory practices against the international standards. The IMF report suggests that the Office of the Superintendent of Financial Institutions (OSFI) should be empowered to take supervisory measures at the level of the holding company. It highlights that while OSFI requires Federally Regulated Insurers (FRI) FRIs to develop internal capital targets, requirements to develop an Own Risk and Solvency Assessment are scheduled to be implemented in 2014.
March 7, 2014
Canada: Financial Sector Assessment Program-Intensity and Effectiveness of Federal Bank Supervision in Canada-Technical Note
Description: This paper evaluates Financial Sector Assessment Program (FSAP) intensity and effectiveness of Federal Bank supervision in Canada. The IMF report highlights that a key element of effective supervision is a willingness to increase supervisory pressure promptly when a supervisor identifies weaknesses in an institution. The IMF funding for Canadian banks is primarily through deposits and lending focuses on traditional bank products in Canada in the personal and commercial sectors. It also highlights that one of the key characteristics of Canada is a government housing policy that has contributed to a very safe and liquid residential mortgage finance system.
March 7, 2014
Canada: Financial Sector Assessment Program-IOSCO Objectives and Principles of Securities Regulation-Detailed Assessment of Implementation
Description: This paper presents an assessment IMF report on implementation of the International Organization of Securities Commission (IOSCO) principles in Canada. It highlights that developing an integrated and robust view of risks to support supervisory actions remains a key challenge. The IMF report suggests that the securities regulators should continue to take steps to ensure timely decision making in policy formulation. However, the current governance arrangements, based on a consensus building approach across several entities, is expected to affect timeliness of decision making.