Publication: Russian Federation Financial Sector Assessment Program: Bank Resolution and Crisis Management Framework
Loading...
Published
2016-09
ISSN
Date
2016-10-25
Author(s)
Editor(s)
Abstract
The experiences of past financial crises have strengthened the Russian bank resolution framework. The resolution framework has been effective in preserving financial stability. The effectiveness of bank resolution could be improved. Introduction of the full range of resolution powers and safeguards recommended by the Financial Stability Board (FSB) Key Attributes (KAs) would improve the framework’s effectiveness. Resolution measures should be taken without relying on the use of public funds. To ensure adequate bank capitalization, a comprehensive review of banks’ asset portfolios and collateral valuations is warranted.
Link to Data Set
Citation
“International Monetary Fund; World Bank. 2016. Russian Federation Financial Sector Assessment Program: Bank Resolution and Crisis Management Framework. © World Bank. http://hdl.handle.net/10986/25264 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Russian Federation Financial Sector Assessment Program(World Bank, Washington, DC, 2016-07)State-owned financial institutions fall into three main groups: commercial banks, hybrid banks, and development institutions. The larger state-owned commercial banks/ groups include Sberbank, the VTB Bank group, and Gazprombank. Like private commercial banks, these institutions do not have a policy mandate and are profit maximizing, and target similar market segments. The main state hybrid bank is the Russian Agricultural Bank (RAB), which has a policy mandate to focus on agribusiness, while also engaging in broader commercial banking activities. The principal state development institution is the VEB group, which has a broad policy mandate, subject to a legal obligation not to compete with commercial credit institutions. It on-lends or directly lends to firms, but does not collect retail deposits.1 There are also several smaller state-owned banks that primarily engage in commercial activities and are owned by sub-national entities. The authorities should continue pursuing the gradual privatization of state-owned commercial banks, as economic conditions permit. There may be benefits to revisiting the role and structure of the state hybrid and development institutions, with corporate governance reforms being a priority.State-owned financial institutions should not be used to bail out struggling commercial banks. In other respects, the administration of financial subsidies appears to follow a number of good principles, although coordination could be improved. There have been many positive changes in the corporate governance of state-owned banks in recent years. reform of the current ownership structure could support the spread of good corporate governance practices. The composition and functioning of many SOB boards is an area that requires attention. Finally, SOB lending to SOEs should be conducted on an arm’s length basis and on commercial terms.Publication Russian Federation Financial Sector Assessment Program(World Bank, Washington, DC, 2016-07)The overall state of financial inclusion in Russia is relatively advanced along certain basic metrics. The number of adults with accounts at a financial institution stands at 67.4 percent, which compares well to the Europe and Central Asia (ECA) regional average of 51.4 percent. Account penetration has increased by nearly 20 percentage points since 201l, with increases experienced across all segments of the population, including for the poorest 40 percent and for women.1 Russia also has a large number of regulated financial institutions and enjoys 36.98 branches per 100,000 adults, higher than for the United States (32.39) and China (24.03). In addition, usage of accounts and other financial services remains low among the underserved, as does the available range and quality of financial products and services. The main mode for retail payments is still via cash; while underserved individuals may own accounts, many consumers withdraw the full amount they receive from regular government payments or salaries. Most credit and deposit-taking activity still occurs among the middle-high income segments of the population, and there appear to be gaps in terms of both the availability and usage of appropriate savings products for the underserved. The microcredit products that are available to the underserved are of poor quality. There are low levels of trust in the formal financial sector among the Russian population, in particular for microfinance institutions (MFIs).Publication Russian Federation Financial Sector Assessment Program(World Bank, Washington, DC, 2016-09)The establishment of the Central Bank of the Russian Federation (CBR) as a unified or “Mega Regulator” in 2013 is an emblem of the far reaching changes to the legal and supervisory landscape in recent years. The level of compliance with the Basel Core Principles (BCP) reflects the transitional nature of the supervisory practices in Russia at the time of the assessment. The CBR is in the course of developing and enhancing its Risk Based Approach to supervision. The regulatory approach in the Russian Federation is highly rules based and this presents some specific challenges to an effective risk based supervisory regime. Supervision and Anti-Money Laundering and/Countering Terrorist Financing (AML/CFT) regulations have been improved. Effective communication and flow of information has been improving but some limitations still apply.Publication Russian Federation Financial Sector Assessment Program(Washington, DC, 2016-09)Financial stability oversight responsibilities are currently shared between the Central Bank of Russia (CBR) and a high-level inter-agency National Council on Ensuring Financial Stability (FSC). Given its role as the single financial regulator and supervisor since September 2013, CBR has naturally become a macroprudential authority. In recent years, CBR has used a number of macroprudential tools to deal with risks, mainly those stemming from retail lending. An expanded use of macroprudential tools to establish adequate buffers could help safeguard financial stability in the medium term. The economy is highly exposed to swings in oil prices, which in turn may significantly affect financial conditions and amplify business cycles through macrofinancial linkages. In the medium term, greater volatility driven by oil price movements may warrant a larger buildup of buffers to protect banks against solvency risk. The CBR Law should be amended to provide for a more comprehensive set of macroprudential tools. Currently, the law does not provide a legal foundation for CBR to use the full set of recognized macroprudential tools, such as limits on loan-to-value (LTV) and debt service-to-income (DSTI) ratios, as well as on growth of certain credit. The current institutional arrangements appear to be functioning well, but some additional steps could be taken to support timely macroprudential actions in the future. CBR has the necessary technical capacity for systemic risk monitoring and assessment, but additional work is needed. CBR regularly publishes Financial Stability Review, which is indicative of strong analytical capacity.Publication El Salvador Financial Sector Assessment Program(Washington, DC, 2010-11)In El Salvador, the banking safety net emergency liquidity assistance, resolution and deposit insurance- faces particular challenges given it operate in the context of official dollarization. The economy was officially dollarized in 2000 with the adoption of the law on financial integration and of the United States (US) dollar as legal tender. Dollarization constrains a central bank's ability to act as a lender of last resort (LOLR) and provide emergency liquidity assistance (ELA). This note discusses the weaknesses of the current framework and recommendations to ensure the safety net functions more effectively and efficiently. To address systemic liquidity risk in the context of official dollarization, the Banco Central de Reservas (BCR) should be provided with more powers and funds to provide emergency liquidity assistance to banks. The bank resolution scheme, which has not been tested, and the deposit insurance fund, which has insufficient funds, both need to be strengthened. Appropriate roles and formal mechanisms to monitor and manage systemic risk and events should be put in place. However the roles and responsibilities of the various institutions involved in the safety net are not always consistent with their objectives, powers, and mandates, while a well-specified strategy to preserve the stability of the system (e.g., with clear responsibilities for monitoring systemic risks and taking macro prudential decisions) and definition or formal measurement of systemic risk have not yet been established. Furthermore, coordination with foreign supervisors of international banks does not include designing contingency plans to address a possible cross-border event. This paper is divided into following four parts: part one is introduction; part two gives systemic liquidity management and emergency liquidity assistance; part three is bank resolution and deposit insurance; and part four gives crisis management arrangements.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.