A new year brings new opportunities. People have new resolutions and every new year tendencies change. Companies bring new possibilities and objects to purchase. Every new year the companies and organisation change and develop. And the International Monetary Fund (IMF) is not different. This organisation has published under the Financial Sector Assessment Program (FSAP) 14 new assessments. Eight of this year’s are mandatory: Australia, Austria, Canada, France, Italy, Poland, Singapore and Switzerland. The other six are voluntary: Algeria, Bahamas, Kuwait, FYR Macedonia, Malta and Thailand. Do you want to know more about this organisation and its program? Keep reading!
What is the IMF?
First, it is important to know what is the International Monetary Fund. It is an organisation formed by 189 countries. It was founded in 1945 and it is governed by and accountable to those countries. Thus, this make it an almost globally membership. Nowadays, they are working to foster global monetary cooperation, to secure financial stability, facilitate economic trade, etc.
Nevertheless, the primary purpose is to ensure the stability of the international monetary system. This system allows countries and their citizens to transact with each other.
Therefore, we can say that the IMG is one of the main organisations in the world. Moreover, it is one of the most important and deals with different challenges all over the world.
What is the FSAP?
This document is an in-depth analysis of a country’s financial sector. This is the main tool to assess countries in their financial stability. The IMF develops from 12 to 14 of this assessments every year.
Since 2010, the world’s top financial sectors have a mandatory financial check-up every five years. On the other hand, in emerging countries and economies,, the IMF works jointly with the World Bank. While the IMF focus on financial stability, the World Bank works on financial development issues.
Therefore, this is a valuable instrument for economies and countries worldwide to increase their profits and to improve their economies. The IMF and the World Bank work for these objectives collectively in order to help those countries to emerge and to deal with their economic problems.
The highlights of 2019
The FSAP has pointed out several characteristics of the economic systems in the countries that have received the assessment. These are some of the examples:
- Australia: This country had 27 years of uninterrupted economic growth. Yet, it also holds a rise of household debt and a buildup of real state exposure in a concentrated banking system. This assessment will analyse the risks and vulnerabilities in the financial system. Moreover, they will examine the effectiveness of banking, insurance, crisis management arrangements, etc.
- Canada: It has a large and sophisticated system. It experimented strong lost amid limited losses from the 2015-16 oil price shock. Nevertheless, the assessment will analyse the resiliency of banks and mortgage insurers. Thus, it will analyse the rapidly rising house prices. Furthermore, the FSAP will point out the need to enhance systemic risk oversight.
- France: Its financial system is characterised for being large and sophisticated. Moreover, it plays a meaningful role in the European market. The FSAP will focus on stress-testing along with contagion risks across borders.
- Italy: In the last years, the level of capital held by banks increased. On the other hand, their quality of assets improved. Nevertheless, there was a rise of vulnerabilities due to the government bond yields and the slowing economy. The assessment will evaluate, therefore, financial oversight for banks, securities markets, etc.
- Singapore: Its financial system it’s highly integrated in the international financial markets. Besides, it is a critical financial hub in the area. The country experienced an economic growth. This is due to openness, prudent, and forward-looking policies. The assessment will examine the stability aspects of the financial sector’s cross-border linkages.
Those were some of the examples of the assessment. As you can see, the international markets are linked to each others and the IMF needs to analyse the features of the different countries in order for everything to work properly. 2019 has just begun and it is possible to say that it will bring several possibilities for the financial field. It is just a matter of time that we will see the results of these measures and how countries and its economies develop over the years.
If you want to be an expert on the field, there is a perfect opportunity for you at the University of Alcala in Spain. We offer you the best Master in Financial Risk Management to improve your career and take the path to success. Furthermore, with the possibility of doing it online, you can do it whenever and wherever you want. What are you waiting for? Contact us now and get a better future!
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