Financial Soundness Indicators
INTRODUCTION
Financial soundness indicators (FSIs) are indicators compiled to monitor the health and soundness of financial institutions and markets, and of their corporate and household counterparts. FSIs include both aggregated information on financial institutions and indicators that are representative of markets in which financial institutions operate. Macro prudential indicators include both FSIs and other indicators that support the assessment and monitoring of the strengths and vulnerabilities of financial systems, notably macroeconomic indicators. Macro prudential analysis is the assessment and monitoring of the strengths and vulnerabilities of financial systems. This encompasses quantitative information from both FSIs and indicators that provide a broader picture of economic and financial circumstances, such as GDP growth and inflation, along with information on the structure of the financial system, qualitative information on the institutional and regulatory framework—particularly through assessments of compliance with international financial sector standards and codes, and the outcome of stress tests
Officials at central banks and supervisory agencies for the financial sector who are involved in the collection, compilation, and analysis of financial Soundness indicators.
Course Objectives
- Compile FSIs in accordance with the methodology of the FSI Guide, using source data obtainable from sectorial financial statements and supervisory report forms.
- Calculate FSIs using different consolidation bases and interpret the different results obtained.
- Analyze and interpret FSIs compiled for the financial sector and their use in financial sector supervision and macro-prudential policy.
- Encouraged to compile and monitor FSIs systematically, based on available data.
- Monitoring and analysis of FSIs should continue to be strengthened through the FSAP process and, more broadly, in the context of surveillance, technical assistance, and policy development work.