OREANDA-NEWS. April 04, 2016. A joint International Monetary Fund (IMF) and World Bank (WB) mission, led by Karl Habermeier (IMF) and Aurora Ferrari (WB), visited Moscow during March 15–30, 2016 to conduct an assessment under the Financial Sector Assessment Program (FSAP). The FSAP assessed financial sector strengths and vulnerabilities, and reviewed the supervisory framework, contingency arrangements, and measures to promote financial sector development. The mission met with Ms. Elvira Nabiullina, Governor of the Central Bank of Russia (CBR), other senior central bank and government officials, as well as financial sector representatives, including banks.

At the conclusion of the mission, Mr. Habermeier and Ms. Ferrari issued the following statement:

“Against the background of a challenging macroeconomic environment, the banking system has been kept stable by the authorities’ decisive policy response, which included liquidity provision, capital support, and temporary regulatory forbearance. The FSAP team and the authorities discussed actions to make the banking system stronger and more resilient to downside risks, notably improvements to the resolution framework, a review of banks’ asset quality, and strengthening banks’ capital.

“With the transformation of the CBR into a mega regulator, supervision of the financial sector has been enhanced. The FSAP team conducted assessments of the adherence to international standards in the areas of banking supervision, securities markets, and insurance. These assessments will serve to inform the further development of comprehensive risk-based supervision of the financial sector. The authorities have also made considerable progress in establishing an effective macroprudential policy framework, and are encouraged to expand the range of macroprudential policy tools.

“Over the medium and longer terms, the diversification and deepening of the financial sector are priorities to support strong and sustainable economic growth. Currently, financial intermediation provides a relatively low contribution to growth. Comprehensive measures need to be taken to raise financial inclusion and the efficiency of the highly concentrated and mostly state-owned banking system.”

Background

The global financial crisis showed that the health and functioning of a country’s financial sector has far-reaching implications for its economy as well as for other economies. The Financial Sector Assessment Program (FSAP), established in 1999, is a comprehensive and in-depth analysis of a country’s financial sector. FSAP assessments are the joint responsibility of the IMF and World Bank in developing economies and emerging markets and of the IMF alone in advanced economies. The FSAP includes two major components: a financial stability assessment, which is the responsibility of the IMF, and a financial development assessment, the responsibility of the World Bank. To date, more than three-quarters of the member countries have undergone assessments. For more information, visit http://www.imf.org/external/np/exr/facts/fsap.htm. and www.worldbank.org/fsap