SLIDE 1
International Monetary Fund Vienna Initiative
Current Home-Host Issues in CESE
Vienna, March 2009
Topics
Monitoring Liquidity Capital needs Other
2 March 2009
Current Home-Host Issues in CESE Vienna, March 2009 Current - - PowerPoint PPT Presentation
Current Home-Host Issues in CESE Vienna, March 2009 Current - - PowerPoint PPT Presentation
International Monetary Fund Vienna Initiative Current Home-Host Issues in CESE Vienna, March 2009 Current Home-Host Issues in CESE Topics Monitoring Liquidity Capital needs Other 2 March 2009 Current Home-Host Issues in CESE Monitoring
SLIDE 2
SLIDE 3
Monitoring
Interbank claims roll-over
- by host central bank/supervisor
Cross-border lending
- by home central bank/supervisor
Loan losses
- jointly by home and host supervisors
3 March 2009
Current Home-Host Issues in CESE
SLIDE 4
Liquidity
Parent bank commitments
- Country by country
- How to prevent beggar-thy-neighbor?
- Limited eligible collateral
Home support measures
- Non-discriminatory
Avoid liquidity hoarding
4 March 2009
Current Home-Host Issues in CESE
SLIDE 5
Liquidity
Local currency liquidity
- Widening eligible collateral
– Quasi-fiscal risk
- Lower reserve requirements
Role of IFIs’ support
- How much roll-over needed for credibility?
- How large a buffer is needed?
5 March 2009
Current Home-Host Issues in CESE
SLIDE 6
Capital needs
Stress testing
- Comparable methodology
- Comparable scenarios
Task allocation
- IMF and hosts do top down
- EBRD and home do bank by bank
How to accommodate confidentiality?
6 March 2009
Current Home-Host Issues in CESE
SLIDE 7
Capital needs
How much capital needed?
- Recognize current losses up front
- Build buffers
– Stress testing
- How much for groups, how much for
subsidiaries?
7 March 2009
Current Home-Host Issues in CESE
SLIDE 8
Capital needs
Who provides?
- Parent groups
- Home authorities
- Host authorities
– Local banks – Banks of systemic importance to host
8 March 2009
Current Home-Host Issues in CESE
SLIDE 9
Capital needs
Conditions
- How coercive?
- Government representation
– Role of hosts
- Losses for shareholders
- Governance
- Form of capital
- Exit strategy
9 March 2009
Current Home-Host Issues in CESE
SLIDE 10
Other Issues
Loan work out approach Support for borrowers
- Non-protectionist, non-credit diverting
Asset management corporation Government debt management
10 March 2009