Financial Sector Assessment Program: IEG Review of the Joint World Bank and IMF Initiative

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World Bank Publications, 2006 M01 1 - 94 pages
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"The Financial Sector Assessment Program (FSAP) is a major initiative, undertaken jointly by the World Bank and the IMF, in response to the financial crises of the late 1990s. The ultimate objectives of the program are (i) the identification and resolution of financial sector vulnerabilities and their macroeconomic stability implications; and (ii) fostering financial sector development and its contribution to economic growth. In addition, the FSAP was expected to help the Bank, Fund, and other institutions design appropriate assistance to address issues identified by the FSAP. The evaluation found that the FSAP is a good quality diagnostic tool. Joint Bank-Fund cooperation has allowed an integrated approach towards financial sector vulnerabilities and development needs, and has expanded the depth and quality of the skills base. The assessments, however, fall short in prioritizing recommendations and integrating the findings and recommendations of the assessments into its overall programs."

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Page 7 - East Asia and Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa...
Page xiv - While it is still too early to judge the full impact of the program, the assessments have been well received, and country authorities have cited the assessments for (i) providing an "independent evaluation...
Page 51 - The main findings from the surveys have been incorporated in the report. To ensure the confidentiality of survey responses, an external company was hired to administer the implementation and collection of results.1 The surveys were conducted in the spring of 2005, to a large degree through an online modality2 Population Surveyed Survey questionnaires were sent to five groups of stakeholders, consisting of different users and producers of the FSAP:3 1.
Page 17 - Interpretation of the results. More attention needs to be given to the interpretation of stress test results, not only in light of the methodological caveats but also in terms of the relative importance of different shocks (eg, avoid overemphasizing market risks when credit risks are more relevant from a vulnerability perspective). This is an area where many FSAPs are weak, but Korea and Cameroon are examples of good practices.
Page 65 - FSAP for stress tests, in part because they highlight the link to macroeconomic developments and can be a useful tool to help missions form an overall view of a financial system's robustness. However, it is also clear that stress tests are subject to limitations and their value erodes over time.
Page 51 - Survey Response The overall stakeholder response to the survey was quite high (53 percent of the net deliverable sample).6 Significantly different response rates were obtained across groups; those from the authorities and FSAF leaders and members were the highest at around 60 percent (see table below) . Source: IEO report, January 2006.
Page 20 - The limitations on what can realistically be expected from updates of different scope and depth (eg, that narrowly focused updates cannot be expected to provide an in-depth assessment of progress in sectors thatfall outside of its scope) are not adequately signaled to the reader.
Page 32 - Even the Financial Sector Reform and Strengthening Initiative (FIRST), which was set up specifically to provide follow-up to the FSAP, has had a difficult time accessing information needed to design programs with significant impact in the country.
Page 67 - Stakeholders other than the authorities that had been involved with more than one FSAP were invited to submit a survey response for each country (up to a maximum of three).
Page 32 - FSAPs rarely led to the development of an overall strategy for financial development, with a clear action plan that could be implemented by the authorities with donor assistance.

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