HIGH STOCK OF NON-PERFORMING ASSETS IN INDIA, MORE PROGRESS NEEDED: IMF
11, Apr 2019
Prelims level : Indian Economy Mains level : GS-III Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Why in News:
- IMF head of Monetary and Capital Markets Tobias Adrian said there continues to be a high stock of non-performing assets (NPAs) in India, and there has been some progression.
- The Global Financial Stability Report (GFSR) is a semi-annual report by the International Monetary Fund (IMF) that assesses the stability of global financial markets and emerging- market financing. The GFSR provides an assessment of balance sheet vulnerabilities across financial and non-financial sectors in advanced and emerging market economies.
- The level of capitalisation of some banks, particularly government-owned banks should be supported. This is also one of the recommendations of the Financial Sector Assessment Program
- Financial vulnerabilities in China remain high, and the authorities face a difficult trade-off between supporting near-term growth, countering adverse external shock, and containing leverage through regulatory tightening
What is the Global Financial Stability Report?
- The Global Financial Stability Report (GFSR) is a semi-annual report by the International Monetary Fund (IMF) that assesses the stability of global financial markets and emerging- market financing.
- It is released twice per year, in April and October.
- The GFSR focuses on current conditions, especially financial and structural imbalances, that could risk an upset in global financial stability and access to financing by emerging-market countries.
- It emphasizes the ramifications of financial and economic imbalances that are highlighted in one of the IMF’s the World Economic Outlook.
- GFSR usually include systemic risk assessments in worldwide financial markets, worldwide debt management, emerging economic markets and current economic crises that could affect finances worldwide.
Financial Sector Assessment Program (FSAP)
- The Financial Sector Assessment Program (FSAP), established in 1999, is a comprehensive and in-depth assessment of a country’s financial sector.
- FSAPs analyze the resilience of the financial sector, the quality of the regulatory and supervisory framework, and the capacity to manage and resolve financial crises.
- FSAPs produce recommendations of a micro- and macro-prudential nature, tailored country-specific circumstances.
- The FSAP is a key instrument of the Fund’s surveillance