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This paper discusses issues in calibrating the countercyclical capital buffer (CCB) based on a sample of EU countries. It argues that the main indicator for buffer decisions under the Basel III framework, the credit-to-GDP gap, does not always work best in terms of covering bank loan losses that go beyond what could be expected from economic downturns. Instead, in the case of countries with short financial cycles and/or low financial deepening such as transition and developing economies, the Basel gap is shown to work best when computed with a low, smoothing factor and adjusted for the degree of financial deepening. The paper also analyzes issues in calibrating an appropriate size of the CCB and, using a loss function approach, points to a tradeoff between stability of the buffer size and cost efficiency considerations.

Macroeconomics. --- Economics --- Financial Risk Management --- Macroeconomics --- Money and Monetary Policy --- Real Estate --- Business Fluctuations --- Cycles --- Financial Crises --- Housing Supply and Markets --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Economic & financial crises & disasters --- Property & real estate --- Monetary economics --- Credit gaps --- Financial crises --- Financial cycles --- Housing prices --- Credit --- Financial sector policy and analysis --- Prices --- Money --- Business cycles --- Housing --- Estonia, Republic of

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Using a newly-compiled dataset of state-owned enterprises in Sub-Saharan Africa, we present aggregate information about profitability, liquidity and leverage. We find that 40 percent of the close to 300 surveyed SOEs are unprofitable, while larger firms also tend to be illiquid and overleveraged. In cross-sectional regressions we find that SOE debt stock sustainability is impacted by firms’ profitability and liquidity, while macroeconomic factors cannot be shown to matter, expect for some governance variables. Based on these findings and citing country examples, we also illustrate that weak SOE performance may have a macrofinancial impact affecting bank soundness through delinquent loan exposures.

Macroeconomics --- Economics: General --- Exports and Imports --- Finance: General --- Accounting --- Firm Performance: Size, Diversification, and Scope --- Public Enterprises --- Public-Private Enterprises --- Economic History: Government, War, Law, and Regulation: Africa --- Oceania --- Nonprofit Organizations and Public Enterprise: General --- International Lending and Debt Problems --- Portfolio Choice --- Investment Decisions --- Public Administration --- Public Sector Accounting and Audits --- Economic & financial crises & disasters --- Economics of specific sectors --- Public ownership --- nationalization --- International economics --- Finance --- Financial reporting, financial statements --- Public enterprises --- Economic sectors --- Debt sustainability --- External debt --- Liquidity management --- Asset and liability management --- Financial statements --- Public financial management (PFM) --- Arrears --- Currency crises --- Informal sector --- Economics --- Government business enterprises --- Debts, External --- Liquidity --- Finance, Public

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Financial inclusion in Nigeria has had undeniable successes, with the onboarding of residents to the banking sector consistently progressing. But the overall exclusion rates continue to exceed official targets, not least due to low financial literacy. Going forward, Nigeria’s financial inclusion strategy should more systematically leverage rapidly developing digital instruments. Uptake of digital financial services, notably mobile money, is still lower than in peer countries, and overcoming this would require improving digital financial literacy, upgrading digital infrastructure, and promoting incubation and sound practices of fintech firms. Nigeria’s CBDC also has an enabling potential if accompanied by a comprehensive package of supportive policies.

Nigeria --- Money and Monetary Policy --- International Economics --- Industries: Financial Services --- Finance: General --- Monetary Policy --- International Agreements and Observance --- International Organizations --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Central Banks and Their Policies --- Financial Institutions and Services: Government Policy and Regulation --- Financial Literacy --- Financial Markets and the Macroeconomy --- Monetary economics --- International institutions --- Finance --- Financial technology (fintech) --- Monetary policy --- International organization --- Technology --- Financial markets --- Financial services --- International agencies --- Financial services industry --- Banks and banking, Mobile --- Technological innovations

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This paper investigates the efficiency of domestic and foreign banks in the Central American region during 2002-07. Using two main empirical approaches, Data Envelopment Analysis and Stochastic Frontier Analysis, the paper finds that foreign banks are not necessarily more efficient than their domestic counterparts. If anything, the regional banks that were acquired by global banks in a wave of acquisitions during 2005-07 can keep up with the local institutions. The efficiency of these acquired banks, however, is shown to have dropped during the acquisition year, recovering only slightly thereafter. Finally, it is important to account for the environment in which banks operate, as country-, sector- and firm-specific characteristics are found to have a considerable influence on bank efficiency.

Banks and banking --- Investments, Foreign --- Finance --- Finance. --- Funding --- Funds --- Economics --- Currency question --- Capital exports --- Capital imports --- FDI (Foreign direct investment) --- Foreign direct investment --- Foreign investment --- Foreign investments --- International investment --- Offshore investments --- Outward investments --- Capital movements --- Investments --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Financial institutions --- Money --- Banks and Banking --- Budgeting --- Production and Operations Management --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Macroeconomics: Production --- Taxation, Subsidies, and Revenues: Other Sources of Revenue --- Macroeconomics --- Budgeting & financial management --- Foreign banks --- Productivity --- Tax expenditures --- Banks and banking, Foreign --- Industrial productivity --- Budget --- El Salvador

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This paper studies how Uruguay's regulatory framework was gradually strengthened to address shortcomings identified during the 2002-03 crisis, to align with international standards and, more recently, to deal with cyclical pressures resulting in an acceleration of bank lending. In particular, regulatory reforms pertaining to loan classification and provisioning as well as liquidity requirements are reviewed and evaluated against best practices. The paper concludes that prudential regulation in Uruguay now generally conforms to high standards while also embracing innovative elements such as dynamic provisioning.

Finance --- Business & Economics --- Banking --- Banks and banking --- Liquidity (Economics) --- State supervision --- Assets, Frozen --- Frozen assets --- Agricultural banks --- Banking industry --- Commercial banks --- Depository institutions --- Financial institutions --- Money --- Banks and Banking --- Money and Monetary Policy --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Financial services law & regulation --- Monetary economics --- Loans --- Credit --- Credit risk --- Loan classification --- Liquidity requirements --- Financial regulation and supervision --- Financial risk management --- Uruguay