Country Reports
2023
February 1, 2023
Finland: Financial Sector Assessment Program-Technical Note on Macroprudential Policy Framework and Tools
Description: This technical note highlights Macroprudential Policy Framework and Tools for the Finland Financial Sector Assessment Program. The institutional framework for macroprudential policy in Finland, formalized in 2014, is mostly in line with the IMF guidance for effective macroprudential policymaking. Systemic risk monitoring is well organized and conducted on a timely basis, especially in the household sector. The sustained increase in residential housing loans is of important systemic concern, and the authorities have taken measures to contain relevant risks. The ongoing development of Finland’s positive credit register will provide microdata on household indebtedness and income, which are useful to analyse vulnerabilities and to calibrate policy, and may be useful to authorities when considering the distributional consequences of macroprudential policies. Moreover, the analysis of corporate sector vulnerabilities should be as developed as that of household sector vulnerabilities, and it would be beneficial to address related data gaps.
February 1, 2023
Finland: Financial Sector Assessment Program-Technical Note on Systemic Risk Analysis and Stress Testing
Description: Finland is a small open economy that is significantly exposed to global financial and economic conditions. Following the Global Financial Crisis (GFC), Finland entered a long recession led by the decline of its information and communications technology (ICT) sector. With the implementation of some structural reforms, Finland’s competitiveness improved, as did growth and employment, albeit at a lower rate of growth. The economy was less significantly affected by the COVID-19 pandemic relative to other economies, thanks to its low exposure to service-intensive economic sectors, fiscal policy, and other interventions. However, Finland is now navigating a weaker economic outlook given the war in Ukraine, despite limited direct exposures to Russia.
February 1, 2023
Finland: Financial Sector Assessment Program-Technical Note on Crisis Management and Resolution
Description: The Finnish financial safety net and crisis management arrangements rest on sound statutory foundations. As Finland is part of the Euro Area framework, the resolvability of Significant (SIs) and Less Significant (LSIs) Finnish institutions have improved their compliance with the European Union’s variant of the Financial Stability Board’s loss-absorbing capacity requirements, known as Minimum Requirement for Own Funds and Eligible Liabilities (“MREL”). At a national level, the Finnish authorities have also improved internal and inter-authority crisis preparedness. Reflecting the interconnectedness in the Nordic-Baltic region, in 2018, the Finnish authorities also signed an updated MoU with Nordic-Baltic authorities focused on improving coordination with respect to managing crises in the regional financial system. However, there is still room for improvement in key areas, including LSI resolvability, operational readiness to implement resolution actions, central bank crisis liquidity support arrangements and interagency crisis preparedness.
February 1, 2023
Finland: Financial Sector Assessment Program-Technical Note on Non-Bank Financial Intermediation and Pension Insurance Companies
Description: This note evaluates non-bank financial institutions (NBFI) as a sector in Finland, with a special focus on the pension insurance companies (PIC). The analysis was undertaken against the backdrop of the war in Ukraine, the energy crisis, and rising central bank interest rates in the face of a sustained inflationary surge and the aftermath of the COVID-19 pandemic.
February 1, 2023
Finland: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions
Description: The Financial Sector Assessment Program (FSAP) conducted a focused review that primarily assessed banking regulation and supervision of Finland’s less significant institutions (LSIs).1 LSIs account for around 16 percent of Finland’s banking sector and the regulation and supervision of the rest of the banking sector takes place within the European Central Bank’s (ECB) Single Supervisory Mechanism (SSM). The Finnish Financial Supervisory Authority (FIN-FSA) is under the oversight of the ECB, responsible for the supervision of LSIs.
January 31, 2023
Indonesia: Technical Assistance Report-Financial Soundness Indicators Statistics Mission
Description: The mission worked with the staff of the OJK on the development of FSIs that are in line with the IMF’s 2019 FSIs Compilation Guide (2019 FSIs Guide). As a result of the mission, the OJK compiled 18 core and 12 additional FSIs for deposit takers, and two additional FSIs on the size of the other financial corporations subsector from the available source data. The mission also made recommendations to further align FSIs with the methodology of the 2019 FSIs Guide.
January 30, 2023
Republic of Armenia: Technical Assistance Report on Personal Income Tax: Policy Review and Introduction of a Universal Declaration
Description: This report reviews the Personal Income Tax in Republic of Armenia and identifies policy and administration options to support the introduction of a Universal PIT Declaration, as well as enhance the PIT’s revenue mobilization and equity. We discuss improvements of the PIT’s tax incentives, with a focus on the mortgage interest tax credit, and opportunities to make the PIT more progressive while preserving its revenue mobilization performance. Best practice administrative solutions are presented to facilitate the introduction of the Universal Declaration, including prefilling of information and organizational issues.
January 30, 2023
France: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for France
Description: France saw a robust recovery from the Covid-19 shock but is now facing the repercussions of Russia’s war in Ukraine. In 2021, output rebounded by 6.8 percent and recovered to pre-crisis levels. The recovery was broad-based and faster than in most other European countries. While France is less directly exposed to the energy shock, the war in Ukraine is dampening the recovery by denting confidence and exacerbating supply-side difficulties. Inflation has surged but remains well-below peers thanks to energy price controls and subsidies. These and other measures to support purchasing power keep the fiscal deficit elevated despite the unwinding of Covid-19 support. While capacity utilization remains below pre-crisis levels, labor market conditions have further tightened.