Armenia is a small open economy of $3,937 GDP per capita (2017), a 3 million population and a parliamentary democracy with sound macro-fiscal and financial sector management.
... See More + Macro-financial vulnerabilities include high public debt, low FDI and high exposure to shocks coming from the Russian economy, through FDI, remittances and trade, and high dollarization. Social challenges include a declining and aging population, low formal employment, spatial disparities in living standards and skills mismatches. Other challenges are public and economic governance gaps such as justice reform and corruption, lack of competition and low productivity in both public and corporate sectors. Lack of connectivity illustrated by a low export growth and undiversified trade is a key constraint. Opportunities include a reform-minded government freshly appointed after a 2018 peaceful revolution, an appetite for ICT technological advances and a dynamic diaspora. Armenia can benefit from being a multi-club member, benefiting from Eurasian Economic Union membership and close links to the EU. Greater economic opportunities are key to poverty reduction and shared prosperity as highlighted by the increasing role of employment and wages as drivers of poverty reduction. In line with the above challenges and priorities, pipeline activities support: greater resilience, governance and competition, through a Development Policy Operation, to be delivered in 2019.
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This technical note reviews the cooperative bank and credit union sectors. It focuses on: (i) thesituation of the two sectors that are both in states of transition; (ii) the regulatory and supervisory arrangements; and (iii) the safety net and resolution regime within the context of the crisis management framework.
... See More + In addition, key perspectives are provided as to the sustainability ofinstitutional models and the sectors within a modernizing and competitive banking sector. This note was prepared using information from the authorities and market participants that was received in the first semester of 2018 at the time of the visit of the authors. Although in some instances there is subsequent improvement in the performance of some cooperative banks and credit unions, the authors believe such changes do not modify substantially the main conclusions and recommendations made. Most cooperative banks and credit unions are stable, but each sector has its own issues. The FSAP is broadly supportive of the policy direction for cooperatives, while it questions whether the credit union sector should remain standalone. Combined, cooperative banks and credit unions represent less than 8 percent of deposit takers, though more importantly they serve about 18 percent of the population.
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This brief contains the economic highlights of Indonesia as of March 26, 2019. The Business Competition Supervisory Commission (KPPU) is investigating the special import rights granted for Indonesian Bureau of Logistics (Bulog) to import garlic.
... See More + The Indonesia deposit insurance corporation (LPS) has decided to hold its guaranteed interest rates for Rupiah deposits in commercial and microcredit banks, as well as foreign exchange deposits at 7.00 percent, 9.50 percent and 2.25 percent, respectively.
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As part of the Action Plan implementing its Association Agreement with the EU, signed in September 2017, Ukraine has undertaken to adopt essential cornerstones of the EU legislative framework by year-end 2019.
... See More + In the area of financial services, a joint working group of the National Bank of Ukraine (NBU), the Ukrainian Deposit Insurance Fund (DGF), and the World Bank Financial Sector Advisory Center (FinSAC) was established to develop an enhanced bank resolution framework aligned with the European Bank Recovery and Resolution Directive (BRRD). Against the overall objective of international standards – ensuring effective bank resolution while safeguarding overall financial stability and reducing the likelihood of public support – the group identified current differences and proposes key measures and legal amendments required to align the Ukrainian bankresolution framework with the BRRD. It also references reforms warranted in related areas as well as conditions for operationalization (listed below) that should be addressed in order to ensure the efficient operationalization of a BRRD aligned framework. This does not imply a recommendation to pursue immediate and full compliance. The gradual phasing-in or postponement of certain elements,such as creation of a resolution fund or the introduction of minimum requirement of eligible liabilities (MREL), as well as divergences in light of particularities due to European integration processes (like state aid driven requirements) and adaptations to local financial market conditionswill be warranted.Significant legislative progress has been made in Ukraine since the financial crisis of 2008. One of the most important financial sector reforms was the transformation of the DGF from a pure deposit insurance and payout entity (paybox) to a bank resolution authority. Further reforms were initiated and supported by the World Bank Financial Sector Development Policy Loan series in 2014 and 2015,with FinSAC support, aimed at strengthening the operational, financial, and regulatory capacity ofthe DGF to cope with massive bank failures. New resolution tools were introduced and a mechanismfor state participation in the resolution of systemically important banks was defined. Despite more than 90 bank failures since the beginning of 2014 authorities have managed to restore public confidence, giving an important stabilization signal to the market. However, the framework in practice relies almost exclusively on public funding and is confronted with a variety of complex implementation problems. Successful recoveries are rare due, in particular, to the substantial erosion of banks’ asset base before insolvency (fraudulent payments and asset transfers preinsolvency)and related party lending. As a result, the DGF has been burdened by high compensation payments which are borne, ultimately, by the government and taxpayers.
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