Financial-Stability Challenges in European Emerging-Market Countries

This paper examines the financial-stability challenges that will most likely be faced by European emerging-market countries in adapting to the post-crises environment, including the new financial-stability architecture and the other remaining weaknesses revealed by the global and European crises. The paper first reviews the pre-crisis financial-stability architectures in Europe and across the globe and then identifies the key weaknesses revealed by the global crisis. It then describes the micro and macro-prudential components of the new European System of Financial Supervision and some of its design limitations (and only briefly mentions reforms designed to deal with sovereign debt problems). The paper then identifies ten key areas where there are remaining challenges of implementation and additional reforms: six areas pertaining to all countries in Europe as well as the other major financial centers and four areas more germane to emerging-market countries in Europe. In discussing these ten areas, the paper tries to differentiate the relative challenges faced by categories of emerging-market countries, and their possible links to the excessive build-up of vulnerabilities in the pre-crisis period as a potential source of lessons for policy going forward.

Bibliographic Details

Main Author:	Schinasi, Garry
Language:	English
Published:	2011-08-01
Subjects:	ACCOUNTING, ACCOUNTING PRACTICES, ADEQUATE DISCLOSURE, ARBITRAGE, AUDITING, BAILOUT, BALANCE SHEET, BANK FAILURES, BANK FOR INTERNATIONAL SETTLEMENTS, BANK REGULATIONS, BANKING CRISES, BANKING INDUSTRY, BANKING INSTITUTION, BANKING REGULATIONS, BANKING SUPERVISION, BANKING SYSTEMS, BANKRUPTCY, BOND, BROKERS, CAPITAL MARKETS, CAPITAL REQUIREMENTS, CAPITAL SHORTAGE, CENTRAL BANK, CENTRAL BANK INDEPENDENCE, CENTRAL BANKS, CHECKS, CLEARING HOUSES, COLLECTIVE ACTION, COMMERCIAL CODES, COMMON MARKET, CONNECTED LENDING, CONSOLIDATED SUPERVISION, CONSOLIDATION, CORPORATE GOVERNANCE, CREDIT RISK, CRISES MANAGEMENT, CURRENCY, DEBT CRISES, DEBT CRISIS, DECENTRALIZATION, DEPOSIT, DEPOSIT INSURANCE, DEPOSIT INSURANCE SCHEMES, DEPOSITORS, DERIVATIVE, DERIVATIVE MARKETS, DERIVATIVES, DERIVATIVES MARKETS, ECONOMIC EFFICIENCY, EMERGING MARKET, EMERGING MARKET COUNTRIES, EMERGING MARKETS, EMERGING-MARKET, EUROPEAN CENTRAL BANK, EXTERNALITIES, FEDERAL DEPOSIT INSURANCE, FEDERAL DEPOSIT INSURANCE CORPORATION, FEDERAL RESERVE, FINANCE MINISTRIES, FINANCIAL CONGLOMERATES, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL DISTRESS, FINANCIAL INFRASTRUCTURES, FINANCIAL INSTITUTION, FINANCIAL INSTITUTIONS, FINANCIAL INSTRUMENTS, FINANCIAL INTEGRATION, FINANCIAL LIBERALIZATION, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL REGULATION, FINANCIAL RISK, FINANCIAL RISKS, FINANCIAL SECTOR DEVELOPMENTS, FINANCIAL SERVICES, FINANCIAL STABILITY, FINANCIAL STRUCTURE, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FINANCING FACILITIES, FISCAL BURDEN, FIXED EXCHANGE RATE, FOREIGN BANK, FOREIGN BANKS, FOREIGN EXCHANGE, FOREIGN EXCHANGE MARKETS, FOREIGN EXCHANGE TRANSACTIONS, FRAMEWORK FOR SECURITIES, FRAUD, FUNGIBLE, GLOBAL ECONOMY, GLOBAL FINANCE, GLOBAL FINANCIAL SYSTEM, GLOBAL MARKET, GLOBAL MARKETS, GLOBALIZATION, GOVERNANCE MECHANISMS, GOVERNMENT BONDS, GOVERNMENT INVOLVEMENT, HEDGE FUNDS, HOST COUNTRIES, HOST COUNTRY, HOUSING, INSTITUTIONAL ARCHITECTURE, INSTITUTIONAL INVESTORS, INSURANCE, INSURANCE COMPANIES, INSURANCE CORPORATION, INTEREST-RATE DERIVATIVES, INTERNATIONAL BANK, INTERNATIONAL SETTLEMENTS, INTERNATIONAL TRADE, INVESTMENT BANKS, INVESTMENT STRATEGIES, INVESTMENT VEHICLES, INVESTOR BASE, INVESTOR PROTECTION, LABOR MARKETS, LAWS, LEGAL AUTHORITY, LEGAL PROVISIONS, LEGISLATION, LEGISLATIVE FRAMEWORK, LENDER, LENDER OF LAST RESORT, LEVEL PLAYING FIELD, LEVIES, LEVY, LIQUIDATION, LIQUIDITY, LIQUIDITY CRISIS, LIQUIDITY RISKS, LONG-TERM CAPITAL, MACROECONOMIC POLICIES, MANDATES, MARKET COUNTRIES, MARKET DISCIPLINE, MARKET INFRASTRUCTURES, MARKET INTEGRATION, MARKET MAKERS, MARKET SURVEILLANCE, MARKET TRANSPARENCY, MATURITY, MONETARY POLICY, MONEY MARKET, MONEY MARKETS, MORAL SUASION, MORTGAGE, MUTUAL FUNDS, NATIONAL BANKS, NATIONAL GUARANTEES, NATIONAL SECURITIES, NONBANK FINANCIAL INSTITUTIONS, OFF­BALANCE SHEET, PEER PRESSURE, PENSION, PENSION FUNDS, PENSIONS, POLICY RESPONSES, POOR LIQUIDITY, PORTFOLIOS, PRUDENTIAL SUPERVISION, PUBLIC DEBT, PUBLIC POLICY, RECAPITALIZATION, REGULATORY AUTHORITIES, REGULATORY AUTHORITY, REGULATORY FRAMEWORK, REGULATORY PRACTICES, REGULATORY STANDARDS, REGULATORY STRUCTURES, REGULATORY SYSTEM, REPO, REPO MARKET, REPO MARKETS, RISK CAPITAL, RISK DIVERSIFICATION, RISK EXPOSURES, RISK MANAGEMENT, RISK MANAGEMENT SYSTEMS, RISK TAKING, RULE OF LAW, SAFETY NET, SAVINGS, SECURITIES, SECURITIES ISSUANCE, SECURITIES MARKETS, SECURITIES REGULATION, SECURITIES REGULATIONS, SETTLEMENT, SETTLEMENT PROCEDURE, SOLVENCY, SOVEREIGN DEBT, SOVEREIGN DEBT PROBLEMS, SOVEREIGN DEFAULT, SUBSIDIARY, SUPERVISORY AUTHORITIES, SUPERVISORY AUTHORITY, SUPERVISORY FRAMEWORK, SUPERVISORY POWERS, SURCHARGES, SWAPS, SYSTEMIC RISK, SYSTEMIC RISKS, TAX, TAXATION, TRADING, TRANSITION COUNTRIES, TREASURIES, TREASURY, TREATIES, TREATY, TURNOVER, VAR MODELS,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110822113330 https://hdl.handle.net/10986/3535
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