This paper explores how banking sector developments and characteristics influence the propagation of risks from the banking sector to sovereign debt, including how they affect the extent of fiscal costs of banking crises when those occur. It then proposes practices and policies for the fiscal...

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

This paper analyzes the economic determinants of developing country creditworthiness indicators for over 60 developing countries for the period from 1980 to 1993. Our results indicate that economic fundamentals--the ratio of non-gold foreign exchange reserves to imports, the ratio of the current...

This paper constructs and analyzes an optimizing model of a highly-indebted small open economy. An important innovation in the model is the incorporation of sovereign risk through the specification of an upward-sloping foreign debt supply function. The model is used to examine the interaction...

Based on an assessment of external public debt indicators and given the continued buildup of external arrears, the Republic of Congo is classified as "in debt distress". Moreover, despite the recent restructuring agreement with China, public debt remains unsustainable with the net present value...

According to the updated Low-Income Country Debt Sustainability Framework (LIC DSF), the Democratic Republic of the Congo (DRC)'s debt-carrying capacity was assessed as weak. DRC remains at a moderate risk of external and overall debt distress, with limited space to absorb shocks. The debt...

This technical note focuses on the stress testing exercise in 2010 for the financial sector assessment program based on the existing approaches of the Central Bank of Russia, as well as a separate bottom-up exercise. The tests covered broad ranges of risk factors. The single factor tests...

The Swedish banking system faced a severe liquidity strain during the global financial crisis owing to their extensive reliance on global wholesale funding to support expansion in their credit operations. This note gives a detailed review on the recommendations made in the Financial Sector...

This paper proposes an integrated and risk-based approach to the sequencing and coordination of reforms to develop domestic financial markets. The paper argues that there is a hierarchy of financial markets that reflects the complexity of risks in each market and the interlinkages among markets....

This paper discusses key findings of the Financial System Stability Assessment (FSSA) on Moldova. The assessment reveals that vulnerabilities of the financial sector appear to be manageable. Stress tests on likely scenarios do not indicate major vulnerabilities for the banking system as a whole....