The Role of the Prudential Supervision and Financial Restructuring of Banks During Transition to Indirect Instruments of Monetary Control

International Monetary Fund

No 1996/128, IMF Working Papers from International Monetary Fund

Abstract: This paper proposes a stylized sequencing of banking supervision and bank restructuring measures designed to complement and expedite the adoption of indirect instruments of monetary policy. Appropriate sequencing reflects both operational considerations and macroeconomic effects of structural measures. It typically involves implementing initially a critical mass of reforms of prudential supervision and of financial structure of both banks and enterprises, and subsequently adapting and refining these measures in line with the evolution of markets and internal governance. This approach facilitates implementation because the initial cost of bank restructuring can be offset, partly, through the budgetary effects of improved enterprise finances.

Keywords: WP; bank restructuring; banking supervision; monetary management; bank liquidation; resolution strategy; loan loss; liberalized interest rates; bank asset portfolio; bank-restructuring process; problem bank; market development; recovery arrangement; bank capital; bank portfolio; loan workout; Bank resolution; Bank supervision; Loans; Debt reduction; Baltics; Central and Eastern Europe; Eastern Europe; Global (search for similar items in EconPapers)
Pages: 30
Date: 1996-11-01
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1996/128

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