Deposit insurance is a widely adopted policy to promote financial stability in the banking sector. Deposit insurance helps ensure depositors' confidence in the financial system and prevents contagious bank runs, but it also comes with an unintended consequence of encouraging banks to take on excessive risk.
... See More + This paper reviews the economic costs and benefits of deposit insurance and highlights the importance of institutions and specific design features for how well deposit insurance schemes work in practice.
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Policy Research Working Paper WPS8589 SEP 19, 2018
Indonesia’s real sector recorded mixed outcomes with the Manufacturing Purchasing Manager’s Index (PMI) rising to a 23-month high in May 2018. High frequency indicators such as motorcycle sales grew much slower than the previous month.
... See More + On the prices side, headline inflation eased due to a slower increase in raw food prices. Core inflation remained stable, while administered price inflation continued to track downwards. Foreign exchange reserves were down from the previous month, partly due to repayment of external debts and Bank Indonesia’s attempts to manage currency volatility. Indonesian financial assets also recorded mixed outcomes as the Rupiah appreciated and Jakarta Composite Index rose, while bond yields on average, increased across all tenors. Both credit growth and deposit growth accelerated.
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The Programmatic Development Policy Credit (PDPC) series supports Guyana’s reform efforts to reinforce sound financial sector development and to strengthen fiscal management.
... See More + The proposed operation is the first in a series of two operations. The series builds on three pillars of policy reforms. The first pillar supports the Bank of Guyana’s (BOG’s) ability to manage financial stress including establishing a deposit insurance scheme. The second pillar supports both regulatory reform for the insurance sector as well as domestic and international payment transactions. The third pillar supports stronger fiscal management through a sovereign wealth fund (SWF) for intergenerational savings, better debt management, and improved public investment management. The first credit will be in the amount of SDR 24.4 million (US$35 million equivalent). The PDPC forms part of a developing engagement with the Co-operative Republic of Guyana spanning financial sector, fiscal, and oil and gas sector management. Complemented by the increased financial envelope due to the IDA18 Replenishment, this policy dialogue led to the development of the PDPC series as well as a now planned FY19 Systematic Country Diagnostic (SCD) and Country Partnership Framework (CPF). The first operation in the series supports the Government of the Co-operative Republic of Guyana’s (GCRG’s) strong financial sector reform efforts while recognizing through triggers the GCRG’s efforts to accelerate fiscal reform. The newfound wealth will increase demands on fiscal policy, long-term savings, and domestic investments. Fiscal policy will need to be designed to manage the additional sources of volatility in both economic activity and fiscal revenues. Although natural resource extraction has long been a feature of the Guyanese economy, the increase in discovered wealth raises the question of intergenerational savings and the extent to which revenues from extracted resources should be set aside for future generations. To the extent the wealth is not invested abroad, it must be invested wisely in the Co-operative Republic of Guyana. For the private sector that requires an efficient financial sector that allocates the resources to the most economical investments, and for public investment it requires an efficient public investment management system. The GCRG’s commitment to prudent debt management needs to be supported by a modernization and streamlining of the legislative and institutional framework. With the increase in wealth and progressive market access of the country, The Co-operative Republic of Guyana will need to develop a unified and modernized legal framework for debt management and implement a comprehensive medium-term debt strategy to ensure that borrowing is aligned with macroeconomic policy objectives and undertaken at acceptable levels of risk and cost.
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This issue of Indonesia daily economic update for May 15, 2018 contains economic highlights, including that the government has released the Presidential Decree No. 40/2018 on the renewal of Core Tax System which is planned to be effective in 2021, that the Indonesia Deposit Insurance Corporation (LPS) has decided to maintain its guaranteed interest rates of 5.75 percent for foreign exchange deposits and 8.25 percent for rupiah deposited in microcredit banks, and that exports recorded a 9 percent year-on-year growth while imports grew faster by 35 percent in April, resulting in a USD 1.6 billion trade deficit.
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Ratings for the Multi-Sectoral Technical Assistance Project for Mongolia were as follows: outcomes were moderately satisfactory, the Bank performance was moderately satisfactory, and the monitoring and evaluation quality was modest.
... See More + Some lessons learned included: the Results Framework should focus on the specific goals of the project to have more relevant and efficient results monitoring. Because many forces among donors are supporting various reforms in Mongolia, it will be hard to measure the attribution of one particular project if the results indicators are too general and not properly focused on the specific goals of the project. In addition, tracking project progress would be difficult, if the results indicators are beyond the full control of the project. The indicators should be clearly measurable, and ideally, a numerical target should be developed for each indicator. As discussed earlier, in general, the project fell short on comprehensively measuring, analyzing, and describing benefits and impacts on the beneficiaries beyond superficial indicators such as numbers of social workers trained. To effectively analyze and describe project impacts on the beneficiaries in an evidence-based manner, one possibility would have been to design some type of testing/survey to assess the goals. In crisis-response operations, it is important to gauge from the very beginning of an operation the capacity, both technical and political, of the borrower or the implementing agency to implement the proposed reforms. To accommodate the dynamic policy agenda and facilitate project implementation progress, a flexible budget reallocation across subcomponents and activities based on actual disbursement and commitment plans should be considered.
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Implementation Completion and Results Report ICR4382 MAR 28, 2018
The period since the global financial crisis of 2008 has been characterized by the emergence of a broad set of tech-driven financial companies ("fintech" companies), acting in parallel with traditional banking services.
... See More + Although the new players are ramping up competition, pushing digital transformation and exerting pressure on the global financial sector, their services appear to be highly complementary to the ones provided by the more established banks, which are also embracing these technologies.
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The development objective of the State-Owned Financial Institutions Strengthening Project for Serbia is to improve the performance of Banka Postanska Stedionica AD Beograd and promote the reform of development finance institutions and other state-owned financial institutions.
... See More + The project comprises of two components. The first component is support the reform of state owned financial institutions. The second component, strengthen institutional capacity will finance technical assistance (TA) and investments in critical areas that are needed to support the achievement of the disbursement linked indicators (DLIs) and disbursement linked results (DLRs).
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