Conference on European Economic integration
Transcript of Conference on European Economic integration
![Page 1: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/1.jpg)
Conference on European
Economic integration
Katia D’Hulster
Senior Financial Sector Specialist
![Page 2: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/2.jpg)
Question 1
What does the World Bank do to make
CESEE more resilient?
![Page 3: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/3.jpg)
Financial Sector Advisory Center (FinSAC)
Objective:
“to help ECA financial regulators strengthen financial stability”
How?
• Tailored Technical Assistance
• Analytical output
• Regional conferences and workshops
![Page 4: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/4.jpg)
Geographic focus
Authorities from
EU candidates
and potential
candidates
EU member
states
EU neighboring
countries
Central Asian
countries
![Page 5: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/5.jpg)
Thematic focus
Four pillars
Macro prudential
Micro prudential
Recovery &
Resolution
Consumer Protection
and Financial Literary
![Page 6: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/6.jpg)
Question 2
What remains to be done to remove
financial sector legacies that result
from the downturn of the financial cycle
since 2008?
![Page 7: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/7.jpg)
Pillar 1: Macro prudential framework
Institutional
Policy tools
Capacity building
Crisis preparedness
![Page 8: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/8.jpg)
Pillar 2: Micro-prudential framework
NPL reduction
CRD IV
Information sharing
![Page 9: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/9.jpg)
NPL ratios in SEE: high and/or rising,
with the possible exception of Kosovo Bank Nonperforming Loans to Total Loans, %
0
5
10
15
20
25
30
Q1
-07
Q2
-07
Q3
-07
Q4
-07
Q1
-08
Q2
-08
Q3
-08
Q4
-08
Q1
-09
Q2
-09
Q3
-09
Q4
-09
Q1
-10
Q2
-10
Q3
-10
Q4
-10
Q1
-11
Q2
-11
Q3
-11
Q4
-11
Q1
-12
Q2
-12
Q3
-12
Q4
-12
Q1
-13
Albania
Bosnia
Bulgaria
Croatia
Kosovo
Macedonia, FYR
Montenegro
Romania
Serbia
Source: IMF FSI and national authorities NPL definitions not directly comparable
![Page 10: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/10.jpg)
NPL RESOLUTION -- ROAD MAP
![Page 11: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/11.jpg)
Pillar 3: Recovery and Resolution
Underfunded deposit insurance regimes
Legal uncertainty remains
Untested bank resolution frameworks
![Page 12: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/12.jpg)
Pillar 4: Consumer Protection & Financial Literacy
Legal and regulatory frameworks
Institutional arrangements
Information disclosure
Dispute resolution
Financial education
![Page 13: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/13.jpg)
Question 3
What are your thoughts on the policy
responses across the EU and their
implications for CESEE?
![Page 14: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/14.jpg)
Overall
• Slow process, regular slippage in timelines
• “Third countries”
• Tensions between home and host interests
remain
• Many authorities will remain in charge of
banking supervision
• Asset quality review
![Page 15: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/15.jpg)
Banking Union Sequencing of integration
Instruments and powers
Responsibility
![Page 16: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/16.jpg)
Territorial approaches as a result of sequencing of integration
Single Rule Book
Single supervisory mechanism
Single Resolution mechanism and fund
Single deposit protection
Fragmentation
![Page 17: Conference on European Economic integration](https://reader033.fdocuments.in/reader033/viewer/2022042405/625dd2fb515c4f59fa519f08/html5/thumbnails/17.jpg)
Key challenges
• Macro-prudential frameworks not yet fully functioning
• Mechanisms for reducing the stock and flow of NPLs are not yet fully in place
• Loan classification and provisioning requirements will eventually need to become more standardized
• Impact of CRD IV to be estimated and buffers to be implemented
• Bank resolution authority and deposit insurance schemes are in process of being modernized