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This paper discusses key findings of the Financial System Stability Assessment on Algeria. The global crisis has had virtually no impact on Algeria’s financial system, which remains stable overall but thoroughly underdeveloped. Pervasive exchange controls, widespread public ownership, and an abundance of domestic funding have protected banks from external shocks. Financial sector reforms have been pushed to the backburner by the emergence of global financial and regional political turmoil, with privatization of banks halted and consumer lending suspended. The authorities have also made progress in a number of areas implementing the recommendations of the 2007 Financial Sector Assessment Program update.

Banks and banking --- Financial institutions --- Finance --- Funding --- Funds --- Economics --- Currency question --- Financial intermediaries --- Lending institutions --- Associations, institutions, etc. --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Money --- Evaluation. --- Banks and Banking --- Money and Monetary Policy --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Monetary economics --- State-owned banks --- Nonperforming loans --- Credit --- Loans --- Algeria

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KEY ISSUES Background: On February 28, the Executive Board approved a three-year Extended Arrangement with access of SDR 295.42 million (492.4 percent of quota). A purchase of SDR 23.55 million (about EUR 26.4 million) was made in April 2014, and another will be made in the same amount upon completion of the first review. Recent Economic Developments: Growth in 2013 was the lowest in more than 15 years. The economy is showing tentative signs of recovery, but remains below potential. Successive monetary easing has not prevented credit contraction. The banking system remains stable, but asset quality is a concern. Program Performance and Risks: The program is on track. All end-March quantitative performance criteria and structural benchmarks were met, except for the structural benchmark on contracting an external auditor to conduct risk-based audits of arrears payments, which was not met but the government expects to complete in the coming weeks. An indicative target on accumulation of new arrears was not met although by a small margin and inflation has been slightly below the inner band prescribed under the inflation consultation clause. Program risks emanate from the complexity of reforms, particularly in electricity sector, and the need for sustained political commitment over the medium term. Policy Recommendations: No new fiscal measures will be needed in 2014, but the authorities should tackle emerging fiscal risks. Arrears clearance can be accelerated once external audits have progressed sufficiently. Addressing high NPLs will require continued efforts to clean bank and private sector balance sheets. Preparatory work related to the 2015 budget and structural reforms should start soon.

Fiscal policy --- Monetary policy --- Monetary management --- Economic policy --- Currency boards --- Money supply --- Tax policy --- Taxation --- Finance, Public --- Government policy --- Albania --- Economic conditions. --- Banks and Banking --- Exports and Imports --- Public Finance --- Industries: Financial Services --- International Lending and Debt Problems --- Debt --- Debt Management --- Sovereign Debt --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Taxation, Subsidies, and Revenue: General --- Trade: General --- International economics --- Public finance & taxation --- Banking --- Finance --- Arrears --- Public debt --- Revenue administration --- External debt --- Nonperforming loans --- Financial institutions --- Debts, External --- Debts, Public --- Banks and banking --- Revenue --- Exports --- Loans

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This Technical Note focuses on financial sector performance, vulnerabilities, and derivatives in Malaysia. The note highlights that banking sector has undergone consolidation while competition has increased following measures implemented under the Financial Sector Master Plan 2001–2010. Malaysian banks are presently well capitalized with comfortable Tier 1 capital ratios. Stronger financial positions and risk management capability have enabled domestic banking groups to pursue overseas expansions, mostly within the region. The importance to some banks of overseas assets and earnings is reaching levels which, based on international experience, warrant a review of internal controls.

Banks and banking, Foreign --- Banks and banking --- Financial crises --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Crises --- Foreign banks and banking --- Offshore banking (Finance) --- International Monetary Fund --- Internationaal monetair fonds --- International monetary fund --- Malaysia --- Foreign economic relations. --- Banks and Banking --- Money and Monetary Policy --- Islamic Banking and Finance --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Other Economic Systems: Public Economics --- Financial Economics --- Banking --- Monetary economics --- Finance --- Commercial banks --- Islamic banking --- Bank credit --- Credit --- Financial institutions --- Financial services --- Money --- Loans --- Nonperforming loans --- Islamic countries

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KEY ISSUES Unleashing Italy’s Potential The economy is struggling to emerge from a prolonged balance-sheet recession… Tight credit conditions, weak corporate balance sheets, and deeply-rooted structural rigidities continue to weigh on domestic demand. The high level of public debt and membership in a currency union highlight the importance of tackling these structural weaknesses. …and the risks are tilted to the downside. External risks arise from geopolitical tensions, while Italy’s high public debt, large public financing needs, and elevated NPLs leave the economy vulnerable to financial contagion and/or low growth and inflation. Without meaningful reforms, potential growth is projected to remain low. Deep structural changes are urgently needed to secure a recovery and unleash Italy’s growth potential. Moving to a single labor contract with gradually increasing protection would reduce duality. Judicial efficiency could be improved by promoting mediation and enhancing monitoring of court performance. Greater efforts to combat corruption would strengthen the business environment. Implementing reforms simultaneously could be self- reinforcing and generate significant growth synergies. A greater push to clean up banks’ bad loans is needed to support lending in the recovery. More provisioning and write-offs; a private distressed debt market; and enhanced insolvency regime would accelerate the reduction of NPLs. Improved corporate governance and deeper capital markets would support growth and financial stability. A broad strategy to revive the SME sector would complement efforts to strengthen bank balance sheets. This strategy should promote restructuring support for viable, but distressed firms and a quick exit for those that are non-viable. A new fiduciary loan contract and greater sharing of credit information could support alternative financing for new endeavors. Fiscal policy needs to strike a delicate balance between setting the debt ratio on a downward path while helping the economy recover. To support growth, the priority should be to lower marginal tax rates through spending savings and lower tax expenditures. But given the low growth and high interest rate environment, stronger fiscal balances are needed to bring down debt faster. Conditional on the recovery taking hold, a modest structural surplus next year would be appropriate. Policies at the European level could also support growth by easing further monetary conditions should inflation remain too low, and reducing financial fragmentation.

Economic development --- Development, Economic --- Economic growth --- Growth, Economic --- Economic policy --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- Italy --- Economic conditions. --- Economic policy. --- Banks and Banking --- Macroeconomics --- Money and Monetary Policy --- Public Finance --- Industries: Financial Services --- Statistics --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Fiscal Policy --- Debt --- Debt Management --- Sovereign Debt --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Methodology for Collecting, Estimating, and Organizing Macroeconomic Data --- Data Access --- Banking --- Finance --- Public finance & taxation --- Monetary economics --- Econometrics & economic statistics --- Loans --- Public debt --- Fiscal stance --- Credit --- Financial institutions --- Fiscal policy --- Money --- Nonperforming loans --- Banks and banking --- Debts, Public --- Economic statistics

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This paper focuses on Cyprus’ Fourth Review Under the Extended Arrangement Under the Extended Fund Facility (EFF) and Request for Modification of Performance Criteria. The program remains on track. Fiscal targets for the first quarter were met with considerable margins, domestic payment restrictions were fully lifted, and the coop sector was consolidated. The authorities intensified efforts to overcome delays in the implementation of structural measures. There are three key policy challenges: (1) addressing the high level of nonperforming loans; (2) maintaining fiscal sustainability; and (3) strengthening institutions to support fiscal consolidation efforts and long-run growth. Risks to the program remain significant, in particular those related to still strong macro-financial linkages.

Economic development --- Fiscal policy --- Structural adjustment (Economic policy) --- Economic indicators --- Business indicators --- Indicators, Business --- Indicators, Economic --- Leading indicators --- Economic history --- Quality of life --- Economic forecasting --- Index numbers (Economics) --- Social indicators --- Economic policy --- Tax policy --- Taxation --- Finance, Public --- Development, Economic --- Economic growth --- Growth, Economic --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- Government policy --- Cyprus --- Economic conditions. --- E-books --- Banks and Banking --- Macroeconomics --- Money and Monetary Policy --- Public Finance --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Debt --- Debt Management --- Sovereign Debt --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Taxation, Subsidies, and Revenue: General --- Fiscal Policy --- Financial Institutions and Services: General --- Banking --- Public finance & taxation --- Finance --- Monetary economics --- Public debt --- Nonperforming loans --- Credit --- Revenue administration --- Financial institutions --- Money --- Loans --- Banks and banking --- Debts, Public --- Revenue --- Cyprus -- Economic conditions. --- Cyprus -- Economic policy. --- Economic forecasting -- Cyprus. --- Economic indicators -- Cyprus. --- International monetary fund -- Cyprus.