IMF Background Material for its Assessment of China under the Financial Sector Assessment Program

IMF Releases Background Material for its Assessment of China under the Financial Sector Assessment Program
Press Release No. 12/123
April 5, 2012

A joint International Monetary Fund (IMF) and The World Bank assessment of China's financial system was undertaken during 2010 under the Financial Sector Assessment Program (FSAP). The Financial System Stability Assessment (FSSA) report, which is the main IMF output of the FSAP process, was discussed by the Executive Board of the IMF at the time of the annual Article IV discussion in July 2011.

The FSSA report was published on Monday, November 14, 2011. As background for the FSSA, comprehensive assessments were undertaken by the FSAP mission of the financial regulatory infrastructure and the Detailed Assessment Reports of China's observance with international financial standards were prepared during the FSAP exercise. At the request of the Chinese authorities, these five reports are being released today.

The documents published are as follows:

Detailed Assessment of Observance Reports

1. Observance of Basel Core Principles for Effective Banking Supervision
2. Observance of IAIS Insurance Core Principles
3. Observance of IOSCO Objectives and Principles of Securities Regulation
4. Observance of CPSS Core Principles for Systemically Important Payment Systems
5. Observance of CPSS-IOSCO Recommendations for Securities Settlement Systems and Central Counterparties

The FSAP is a comprehensive and in-depth analysis of a country’s financial sector. The FSAP findings provide inputs to the IMF’s broader surveillance of its member countries’ economies, known as Article IV consultations. The focus of the FSAP assessments is to gauge the stability of the financial sector and to assess its potential contribution to growth. To assess financial stability, an FSAP examines the soundness of the banks and other financial institutions, conducts stress tests, rates the quality of financial regulation and supervision against accepted international standards, and evaluates the ability of country authorities to intervene effectively in case of a financial crisis. Assessments in developing and emerging market countries are done by the IMF jointly with the World Bank; those in advanced economies are done by the IMF alone.

This is the first time the Chinese financial system has undergone an FSAP assessment.

Since the FSAP was launched in 1999, more than 130 countries have volunteered to undergo these examinations (many countries more than once), with another 35 or so currently underway or in the pipeline. Following the recent global financial crisis, demand for FSAP assessments has been rising, and all G-20 countries have made a commitment to undergo regular assessments.

For additional information on the program, see the Factsheet and FAQs.

Original link: http://www.imf.org/external/np/sec/pr/2012/pr12123.htm