Romania’s financial sector has strengthened significantly over the last few years. Effective supervisory measures have helped reduce the high level of non-performing loans (NPLs) from 21.5 percent at its peak in 2013 to 6.4 percent as of December 2017.
... See More + Foreign-owned banks’ dependence on parent funding has significantly declined, while deposits from the domestic private sector has increased, reducing liquidity risks. Banks’ capital buffers strengthened, on the back of a slowdown of credit and low interest rates, with an average capital to risk-weighted assets now above 18 percent. The new Supervisory Review and Evaluation Process (SREP) Guidelines of the European Banking Authority (EBA) are still in the initial stages of implementation. The NBR should conduct more risk-focused, banking industry-wide thematic analyses and develop its off-site monitoring tools, such as by conducting bottom up stress tests. The NBR should also build up specialized expertise, in IT and cybersecurity. This will also benefit the systemically important payment and securities settlement systems that are currently being brought under the roof of the NBR. Finally, remaining gaps in the AML/CFT framework should be addressed. The State is expected to play a more targeted role geared toward the closing of these financial sector development gaps. These gaps persist despite the presence of several public initiatives to support access to finance. Several schemes are poorly designed, too fragmented and insufficiently coordinated. It is necessary to adopt a holistic view by encompassing all state institutions and initiatives, eliminating duplications, identifying and considering all market gaps and leveraging commercial finance. The authorities should also consider establishing a Financial Sector Development Committee with a clear development mandate, an effective monitoring and evaluation system and accountability mechanism. Housing finance has grown steadily in a benign credit environment which has seen falls in both interest rates and delinquency rates. However, the law on debt-discharge continues to create uncertainty for lenders and provides a further incentive to rely on the Prima Casa program which is exempted from the provisions of that law. Considering the new personal insolvency law, which provides additional rights for borrowers, the law on debt discharge should be repealed to sustain further housing finance expansion.
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Financial Sector Assessment Program (FSAP) 128694 JUL 17, 2018
The international comovement of equity returns has been viewed as reflecting either pervasive common shocks or local linkages between countries.
... See More + This paper brings these perspectives together by assessing the comovement of equity returns in a dynamic model that allows for both common factors and spatial dependence, using quarterly data for 40 advanced and emerging countries over the past two decades, and including GDP growth, the real interest rate, and credit as fundamental variables. Estimation results employing a bias-corrected quasi-maximum likelihood approach provide strong indication that the cross-country dependence of equity returns results from both spatial effects and common shocks captured by a latent common factor -- weak and strong dependence, respectively. The factor exhibits a robust negative correlation with market measures of aggregate risk. Countries' exposure to the common factor rises with their extent of trade openness and the degree of rigidity of their exchange rate regime. Despite its simplicity, the empirical model fits the data well. All these results are robust to the use of alternative spatial weight matrices. The paper also shows that ignoring cross-country dependence leads to distorted parameter estimates and a marked deterioration of the explanatory power of the empirical model.
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Policy Research Working Paper WPS8516 JUL 11, 2018
The World Bank Group’s (WBG) Country Partnership Strategy (CPS) for Seychelles coversthe period, FY12-FY15. The CPS was extended by one year to FY16 at the Country PartnershipStrategy Progress Report (CPSPR) in FY15.
... See More + This Review covers both the CPS and CPSPRperiod, FY12-16.WBG’s support for Seychelles was in line with the country’s draft Seychelles Medium-Term National Development Strategy 2013–17 (MTNDS), later approved in 2015, which presented the vision and goals for the country. The core aim of the MTNDS was to reduce Seychelles’vulnerability and to provide the basis for long term sustainable development. Specifically, theobjective of the MTNDS was to reduce vulnerability, increase resilience, and provide the basis fora sustainable development. The WBG supported the government in reducing vulnerability andbuilding long-term sustainability with a program centered on two pillars: (i) increasingcompetitiveness and employment and (ii) reducing vulnerability and enhancing resilience, and onecross-cutting foundation, governance and public-sector capacity. The CPS built on the previousInterim Strategy and aimed to deepen and broaden structural reforms via programmatic supportusing Development Policy Lending (DPL) operations, complemented with Analytical and AdvisoryServices (ASA), including technical assistance and reimbursable advisory services (RAS).The IEG concurs with key lessons in the CLR: (i) development policy operations can be mobilized quickly and achieve strong results when complemented by sound analysis and technical assistance but it requires commitment and ownership, (ii) deeper understanding and assessment of political economy would help explain the successes and failures of specific reform efforts and identify factors that might otherwise be missed, and (iii) well-designed and updated results framework prove useful for Bank and Government monitoring of program implementation and results.
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The Infrastructure and Institutions Emergency Recovery Project of Haiti to rehabilitate the section of the Cap-Haitien Labadie road is part of the emergency infrastructure and institutional rehabilitation project known as P120895, following the country's disasters of 12 January 2010.
... See More + It consists of the rehabilitation of this section in order to reduce the risks of accidents but above all to improve the welfare of road users. Activities included in the project will improve resilience to disasters and will reduce vulnerability. No long term negative impacts are anticipated. However, relevant screening and assessment procedures will be used to guide the identification and mitigation of potential adverse impacts.
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