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This report discusses the findings and recommendations made in the Financial Sector Assessment Program for Turkey in the area of financial system stability. The assessment identified some important priorities for further improvement in the policy framework and in implementation. Steps are recommended to raise the effectiveness of financial supervision, enhance governance arrangements, strengthen systemic risk identification and the coordination of macroprudential policies, lower systemic liquidity risks, and address current gaps in crisis management arrangements. A stronger role for the Financial Stability Committee would support more coordinated and effective systemic risk oversight and management.

Banks and banking --- International Monetary Fund --- Internationaal monetair fonds --- International monetary fund --- Banks and Banking --- Finance: General --- Foreign Exchange --- General Financial Markets: Government Policy and Regulation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Finance --- Currency --- Foreign exchange --- Banking --- Systemic risk --- Systemic risk assessment --- Financial Sector Assessment Program --- Financial sector policy and analysis --- Financial sector stability --- Financial risk management --- Financial services industry --- Turkey

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This Technical Note discusses the findings and recommendations in the Financial Sector Assessment Program for Spain in the areas of systemic risk oversight framework and macroprudential policy. Macroprudential oversight for banking is a shared responsibility between Banco de España (BdE) and the European Central Bank. The macroprudential policy stance appears broadly appropriate. BdE has put in place a framework for calibrating capital buffers. The countercyclical capital buffer is currently at zero given that a new financial cycle upturn has not started and a still-negative credit gap and weakly recovering housing prices. The existing macroprudential toolkit would benefit from expansion, particularly to include more effective tools to deal with risks associated with real estate exposures.

Banks and Banking --- Finance: General --- Macroeconomics --- General Financial Markets: Government Policy and Regulation --- Financial Markets and the Macroeconomy --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Finance --- Banking --- Financial sector stability --- Systemic risk --- Macroprudential policy --- Systemic risk assessment --- Financial sector policy and analysis --- Macrofinancial analysis --- Financial risk management --- Financial services industry --- Economic policy --- Banks and banking --- Spain

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COVID-19 pandemic: The Financial Sector Assessment Program (FSAP) work was conducted prior to the COVID-19 pandemic, so this Technical Note (TN) does not assess the impact of the crisis or the recent crisis-related policy measures. Nonetheless, given the FSAP’s focus on vulnerabilities and policy frameworks, the findings and recommendations of the TN remain pertinent. While Denmark’s institutional arrangements are uncommon, the authorities have undertaken several macroprudential measures since the last FSAP. The Minister for Industry, Business and Financial Affairs (MIBFA) has decision-making power over most macroprudential tools in Denmark, which is rare in international practice. However, the Systemic Risk Council (SRC), which includes members from the Danmarks Nationalbank (DN) and Danish Financial Supervisory Authority (DFSA) plays an advisory role and has powers to give recommendations with a comply or explain mechanism. In recent years, the authorities have taken wide-ranging macroprudential policy actions in response to growing systemic vulnerabilities, which have seemed to slow down some of the riskier trends. More recently, in response to the Covid-19 crisis, countercyclical capital buffer (CCyB) has been fully released.

COVID-19 Pandemic, 2020-. --- Banks --- Depository Institutions --- Economic policy --- Finance --- Finance: General --- Financial institutions --- Financial Markets and the Macroeconomy --- Financial risk management --- Financial sector policy and analysis --- General Financial Markets: Government Policy and Regulation --- Housing prices --- Housing Supply and Markets --- Housing --- Industries: Financial Services --- Macroeconomics --- Macroprudential policy --- Micro Finance Institutions --- Mortgages --- Prices --- Property & real estate --- Real Estate --- Systemic risk assessment --- Systemic risk --- Denmark

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This paper formulates a novel modeling framework that delivers: (a) forecasts of indicators of systemic real risk and systemic financial risk based on density forecasts of indicators of real activity and financial health; (b) stress-tests as measures of the dynamics of responses of systemic risk indicators to structural shocks identified by standard macroeconomic and banking theory. Using a large number of quarterly time series of the G-7 economies in 1980Q1-2010Q2, we show that the model exhibits significant out-of sample forecasting power for tail real and financial risk realizations, and that stress testing provides useful early warnings on the build-up of real and financial vulnerabilities.

Economic forecasting --- Financial risk management --- Risk management --- Econometric models. --- Finance: General --- Money and Monetary Policy --- Industries: Financial Services --- General Financial Markets: Government Policy and Regulation --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Institutions and Services: Government Policy and Regulation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Finance --- Monetary economics --- Systemic risk --- Bank credit --- Stress testing --- Systemic risk assessment --- Loans --- Financial sector policy and analysis --- Money --- Financial institutions --- Credit --- United States

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This Technical Note discusses the findings and recommendations made in the Financial Sector Assessment Program for Finland in the area of macroprudential policy framework. The Finnish authorities regularly coordinate and collaborate with international bodies on macroprudential policy. Several macroprudential instruments were formally introduced in the legislation and activated recently. The 2014 Act on Credit Institutions implements macroprudential instruments, including those set out in the European Capital Requirement Directive. Despite the important progress made, there are some improvements that should be considered. The macroprudential policy toolkit should be expanded. The systemic risk buffer should be added to the toolkit, although its activation and level may still need further analysis.

Financial risk. --- Financial risk management. --- Risk management --- Business risk (Finance) --- Money risk (Finance) --- Risk --- Banks and Banking --- Finance: General --- Macroeconomics --- Industries: Financial Services --- Financial Markets and the Macroeconomy --- General Financial Markets: Government Policy and Regulation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Finance --- Banking --- Macroprudential policy --- Systemic risk --- Systemic risk assessment --- Macroprudential policy instruments --- Financial sector policy and analysis --- Loans --- Financial institutions --- Economic policy --- Financial risk management --- Banks and banking --- Finland