Financial-Stability Challenges in European Emerging-Market Countries
This paper examines the financial-stability challenges that will most likely be faced by European emerging-market countries in adapting to the post-crises environment, including the new financial-stability architecture and the other remaining...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110822113330 http://hdl.handle.net/10986/3535 |
| Summary: | This paper examines the
financial-stability challenges that will most likely be
faced by European emerging-market countries in adapting to
the post-crises environment, including the new
financial-stability architecture and the other remaining
weaknesses revealed by the global and European crises. The
paper first reviews the pre-crisis financial-stability
architectures in Europe and across the globe and then
identifies the key weaknesses revealed by the global crisis.
It then describes the micro and macro-prudential components
of the new European System of Financial Supervision and some
of its design limitations (and only briefly mentions reforms
designed to deal with sovereign debt problems). The paper
then identifies ten key areas where there are remaining
challenges of implementation and additional reforms: six
areas pertaining to all countries in Europe as well as the
other major financial centers and four areas more germane to
emerging-market countries in Europe. In discussing these ten
areas, the paper tries to differentiate the relative
challenges faced by categories of emerging-market countries,
and their possible links to the excessive build-up of
vulnerabilities in the pre-crisis period as a potential
source of lessons for policy going forward. |
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