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Provisional Agenda for the Thirty-Ninth Meeting of the International Monetary and Financial Committee.

Financial Risk Management --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Economic & financial crises & disasters --- Early warning systems --- Crisis management

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Stress testing is a useful and increasingly popular, yet sometimes misunderstood, method of analyzing the resilience of financial systems to adverse events. This paper aims to help demystify stress tests, and illustrate their strengths and weaknesses. Using an Excel-based exercise with institution-by-institution data, readers are walked through stress testing for credit risk, interest rate and exchange rate risks, liquidity risk and contagion risk, and are guided in the design of stress testing scenarios. The paper also describes the links between stress testing and other analytical tools, such as financial soundness indicators and supervisory early warning systems. Furthermore, it includes surveys of stress testing practices in central banks and the IMF.

Banks and Banking --- Finance: General --- Industries: Financial Services --- Financial Institutions and Services: Government Policy and Regulation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Finance --- Banking --- Financial services law & regulation --- Stress testing --- Credit risk --- Nonperforming loans --- Market risk --- Financial risk management --- Banks and banking --- Loans --- United Kingdom

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This paper investigates the determinants of exchange rate regime choice in 93 countries during 1990-98. Cross-country analysis of variations in international reserves and nominal exchange rates shows that (i) truly fixed pegs and independent floats differ significantly from other regimes and (ii) significant discrepancies exist between de jure and de facto flexibility. Regression results highlight the influence of political factors (political instability and government temptation to inflate), adequacy of reserves, dollarization (currency substitution), exchange rate risk exposure, and some traditional optimal currency area criteria, in particular capital mobility, on exchange rate regime selection.

Banks and Banking --- Foreign Exchange --- International Monetary Arrangements and Institutions --- Open Economy Macroeconomics --- Economic Development: General --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Currency --- Foreign exchange --- Financial services law & regulation --- Exchange rate arrangements --- Exchange rate flexibility --- Conventional peg --- Exchange rates --- Exchange rate risk --- Financial regulation and supervision --- Financial risk management --- United States

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We contrast how monetary policy affects intangible relative to tangible investment. We document that the stock prices of firms with more intangible assets react less to monetary policy shocks, as identified from Fed Funds futures movements around FOMC announcements. Consistent with the stock price results, instrumental variable local projections confirm that the total investment in firms with more intangible assets responds less to monetary policy, and that intangible investment responds less to monetary policy compared to tangible investment. We identify two mechanisms behind these results. First, firms with intangible assets use less collateral, and therefore respond less to the credit channel of monetary policy. Second, intangible assets have higher depreciation rates, so interest rate changes affect their user cost of capital relatively less.

Investments: General --- Macroeconomics --- Money and Monetary Policy --- Investment --- Capital --- Intangible Capital --- Capacity --- Monetary Policy --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Price Level --- Inflation --- Deflation --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Monetary economics --- Depreciation --- Intangible capital --- Asset prices --- Currencies --- Investment policy --- National accounts --- Prices --- Money --- Saving and investment --- United States

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This note, prepared ahead of the G20 Summit (November 15), builds upon the points laid out in the Managing Director’s letter to the Heads of State and Government (November 9). It lays out two tasks ahead for policy makers. Policies for now should cover:(i)implementing and coordinating policies to sustain demand; (ii) providing liquidity support to emerging economies; and (iii) protecting low-income countries. Longer term reforms of the financial architecture should touch upon:(i) the design of financial regulation; (ii) a better way of assessing systemic risk; and (iii) mechanisms for more effective actions for crisis prevention and resolution.

Economic assistance --- International Monetary Fund --- Planning. --- Internationaal monetair fonds --- International monetary fund --- Finance: General --- Financial Risk Management --- Industries: Financial Services --- Financial Crises --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Portfolio Choice --- Investment Decisions --- General Financial Markets: Government Policy and Regulation --- Financial Institutions and Services: General --- Economic & financial crises & disasters --- Finance --- Financial crises --- Early warning systems --- Liquidity --- Systemic risk --- Financial sector --- Crisis management --- Economics --- Financial risk management --- Financial services industry