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This technical note (TN) provides a stocktaking of the current state of the implementation of the key recommendations made by the IMF and the World Bank in their 2015 assessment report on the observance of Basel Core Principles (BCPs) for effective banking supervision in Bulgaria. It provides an overview of the most recent initiatives taken by the Bulgarian National Bank (BNB) to address the shortcomings found in the domestic supervisory regime. It also reflects the regulatory and supervisory framework in place as of the date of the completion of this review. This note does not provide an exhaustive analysis of each of the 29 BCPs and is not meant to revise the ratings assigned by the BCP assessors in their 2015 report. The focus is on the eight principles that were found to be materially non-compliant in 2015. In addition, there is analysis of the progress achieved on six principles rated as largely compliant in 2015 that have an important bearing on the effectiveness of supervision and where the BNB is working to enhance its supervisory practice.

Finance and Financial Sector Development --- Financial and Private Sector Development --- Financial Regulation & Supervision --- International Financial Standards and Systems

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Housing needs are high in Mexico despite quantitative progress in the last 10 years.Global data hide mismatches between housing demand and supply. First, urban growth relied for a long time on a pattern of urban sprawl, with mass-scale developments of individual units were built outside cities where land is affordable, but far from jobs and services and with related high transportation cost.Second, the housing shortage affects some household categories more than others.The housing finance system has been contributing to these mismatches.The way the two housing provident funds that dominate the mortgage market used to function was an inducement to the urban sprawl pattern. On the supply side, they were acting as demand aggregators for developers, warrantying that projects would meet the effective demand of purchasers qualified to borrow mortgage loans, and would thus avoid market risk largely irrespective of the location of the projects. On the demand side, households were incentivized to take out loans at below market conditions to which they were entitled once in their lifetime.The new policy was outlined in February 2013, and two national 2014-2018 Programs for Urban development and Housing were approved in 2014.Housing finance has a critical role to play to support a more balanced urban development and to help improve living conditions.The growth of the market size despite the stability of the number of loans suggests that better, higher priced housing has become affordable to more households.The improvement of lending conditions also increased the affordability of finance.The macro-economic context allowed the desindexation of housing finance, a major change relatively to the 20-year period delimited by two financial crises. The mortgage Sofoles /Sofomes sector largely disappeared following the 2008-2009 financial crisis.An amendment to the General Law of Credit and Auxiliary Organizations and Activities removed the category of Sofol.SHF reoriented its activities following the demise of the Sofoles/Sofomes, without a totally clear systemic justification in some cases.On the primary market, since the disappearance of most of the sector, SHF only refinanced new mortgages for only MXN 5.3 billion in 2015 (out of about MXN 300 billion total originations).This growth has been partially driven by changes in the market structure. Two factors have played a special role in this growth: (i) the demise of Sofoles/Sofomes, since several of them were bought by banks and are now consolidated with them; (ii) the success of the lending in partnership with the Institutes. In addition, several new comers entered the mortgage market in the last 10 years, including Inmobiliaro Mexicano or ABC Capital. Still, the overall market development is largely due to the growth strategy of three lenders. These entities face several obstacles: (i) gaps that still exist in the property rights (persisting ejido land tenure for instance) and registration systems in the geographic areas - small cities, rural areas- where these institutions are active, which prevent them from securing loans as would be required by long term credit; (ii) regulatory maturity restrictions: up to 5 and 8 years for SOCAPS and Sofipos of categories I and II respectively. These limits are however lifted if housing loans are funded by SHF, the case for only a minority of institutions; (iv) insufficient operational capacities to lend medium or long term loans for housing; and (v) long term funding.

Access to Finance --- Finance and Financial Sector Development --- Financial and Private Sector Development --- International Financial Standards and Systems

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Mexico's challenges in infrastructure finance can be framed along similar lines as other Advanced Economies (AEs) and large Emerging Market Economies (EMEs). Mexico is particularly well placed to make capital markets a reliable financing source complementing bank financing. Its capital markets are relatively mature, there is sufficient critical mass of long-term domestic institutional investors, and there is a relevant track record of innovative solutions for infrastructure financing from which to build. Section B of this Technical Note assesses the degree of maturity of the Mexican capital markets in those aspects that are most relevant for infrastructure financing. Section C discusses the different elements of the infrastructure financing ecosystem taking stock of the PPP framework and financial innovations that have been developed, with emphasis on impact, expected developments and potential improvements. Section D, discusses the role of development financial institutions in mobilizing private sector financing with emphasis on Banobras and Fonadin. Finally, section E concludes and provides a set of recommendations

Capital Markets and Capital Flows --- Financial and Private Sector Development --- Infrastructure Economics and Finance --- International Financial Standards and Systems

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The Central Bank of Chile (Banco Central de Chile, BCCh) and Chile's Ministry of Finance, in their letter of January 9th, 2015, requested the World Bank to undertake a stand-alone Review of Standards and Codes (ROSC) module of the Principles for Financial Market Infrastructures (PFMI) of the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commission (IOSCO). The main tool used by the assessment was the CPSS-IOSCO Assessment Methodology for the Principles for Financial Market Infrastructure and the Responsibilities of Authorities. Each of the FMIs and Chilean authorities - the Banco Central de Chile (BCCh), the Superintendencia de Valores y Seguros (SVS) and the Superintendencia de Bancos e Instituciones Financieras (SBIF) - completed a self-assessment for the PFMI and the Responsibilities of Authorities, respectively. On this basis, the WBG team and the local team conducted detailed interviews with senior and mid-level managers of all the respective institutions, and prepared the assessment reports. In addition to the self-assessments, other sources of information included the applicable laws and regulations, as well as each FMI's main policies and internal documents (e.g. detailed policies, and processes and procedures for certain key areas) which were shared by the FMIs with the assessors, and other information available at each FMI's website (e.g. statistics). The WBG and local teams also met with a number of users of these FMIs, including two large commercial banks and two brokers-dealers that are not part of local bank-lead conglomerates.

Finance and Financial Sector Development --- Financial and Private Sector Development --- Financial Regulation --- Financial Regulation & Supervision --- Governance --- International Financial Standards and Systems

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This Financial Sector Assessment (FSA) summarizes the developmental aspects of the 2016 FSAP report for the Republic of El Salvador. A World Bank mission visited San Salvador from March 6 to 16, 2016 to review the developmental aspects of the Financial Sector Assessment Program (FSAP) conducted in 2010.1 As previously agreed with the authorities, this FSAP Development Module focused on (i) financial systems issues, including competition and efficiency; (ii) financial inclusion and non-bank financial institution issues, (iii) public sector banks, (iv) financial system infrastructure, including payments, remittances transfers, and credit information systems; (v) capital market and private pensions development issues; and (vi) insurance. The report summarizes the diagnostic findings, progress made since the last FSAP, and recommendations for further regulatory, institutional and market development actions. The executive summary, following next, lists the main highlights and conclusions of this FSAP mission.

Competition --- Finance and Financial Sector Development --- Financial and Private Sector Development --- Financial Regulation & Supervision --- Governance --- Insurance --- Insurance & Risk Mitigation --- International Financial Standards and Systems --- Remittances