Contents -- Abbreviations and Acronyms -- Preface -- Contributors -- Chapter 1 Financial Sector Assessments:Overall Framework and Executive Summary -- 1.1 Introduction -- 1.2 Overall Analytical and Assessment Framework -Executive Summary -- Annex 1.A Tailoring Financial Sector Assessment to Country Needs -- Notes -- References and Other Sources -- Chapter 2 Indicators of Financial Structure, Development, and Soundness -- 2.1 Financial Structure and Development -- 2.1.1 System-wide Indicators -- 2.1.2 Breadth of the Financial System -- 2.1.3 Competition, Concentration, and Efficiency -- 2.1.4 Scope and Coverage of Financial Services -- 2.2 Financial Soundness Indicators -- 2.2.1 FSIs for Non-financial Sectors -- 2.2.2 FSIs for Banking -- 2.2.3 FSIs for Insurance -- 2.2.4 FSIs for Securities Markets -- 2.2.5 Market-Based Indicators of Financial Soundness -- 2.3 Aggregate Balance Sheet Structure of Financial and Non-financial Sectors -Inter-sectoral Linkages -- Notes -- References -- Chapter 3 Assessing Financial Stability -- 3.1 Overall Framework for Stability Analysis and Assessment -- 3.2 Macroeconomic and Financial Market Developments -- 3.3 Macroprudential Surveillance Framework -- 3.3.1 Analysis of Financial Soundness Indicators -- 3.3.2 System-Focused Stress Testing -- 3.4 Analysis of Macrofinancial Linkages -- 3.4.1 Effect of Financial Soundness on Macroeconomic Developments -- 3.4.2 Effect of Financial System Soundness on Debt Sustainability -- 3.4.3 Effect of Financial Soundness on Growth and Financial Development -- 3.5 Special Topics in Financial Stability Analysis -- 3.5.1 International Financial Centers and Offshore Financial Centers -- 3.5.2 Capital Account Liberalization -- 3.5.3 Dollarization: Implications for Stability -- 3.5.4 Islamic Banking -Stability Issues -- 3.6 Key Policy Issues and Policy Priorities to Support Stability.

Notes -- References -- Chapter 4 Assessing Financial Structure and Financial Development -- 4.1 Overview -- 4.1.1 Motivation for Assessing Financial Structure and Financial Development -- 4.1.2 Scope of Analysis -- 4.1.3 Stability and Development: Complementarities Despite the Different Perspective -- 4.2 Quantitative Benchmarking -- 4.3 Review of Legal, Informational, and Transactional Technology Infrastructures for Access and Development -- 4.3.1 Legal Infrastructure -- 4.3.2 Information Infrastructures -- 4.3.3 Transactional Technology Infrastructures -- 4.4 Sectoral Development Reviews -- 4.4.1 Banking -- 4.4.2 Near-banks -- 4.4.3 Insurance and Collective Investment Arrangements -- 4.4.4 Securities Markets -- 4.5 The Demand-Side Reviews and the Effect of Finance on the Real Sector -- 4.5.1 Enterprise Finance -- 4.5.2 Households, Firms, and Microenterprises -- 4.6 Reviews of Cross-Cutting Issues -- 4.6.1 Missing Markets and Missing Products -- 4.6.2 Taxation Issues -- 4.6.3 Competition Aspects -- 4.6.4 Development Obstacles Imposed by Unwarranted Prudential Regulation -- 4.7 From Finding Facts to Creating Policies -- Notes -- References -- Chapter 5 Evaluating Financial Sector Supervision: Banking, Insurance, and Securities Markets -- 5.1 Legal and Institutional Framework for Financial Supervision -- 5.2 Aspects of Financial Safety Nets -- 5.2.1 Frameworks for Liquidity Support -- 5.2.2 Deposit Insurance -- 5.2.3 Investor and Policyholder Protection Schemes -- 5.2.4 Crisis Management -- 5.3 Assessment of Banking Supervision -- 5.3.1 Basel Core Principles -Their Scope and Coverage, and Their Relevance to Stability and Structural Development -- 5.3.2 Preconditions for Effective Banking Supervision -- 5.3.3 Assessment Methodology and Assessment Experience -- 5.3.4 Basel II -- 5.3.5 Bank Insolvency Procedures: Emerging Bank-Fund Guidelines.

5.3.6 Large and Complex Financial Institutions -- 5.3.7 Consolidated Supervision -- 5.3.8 Unique Risks in Islamic Banking -- 5.4 Assessment of Insurance Supervision -- 5.4.1 Relevance to Stability and Development -- 5.4.2 The Structure of the ICPs -- 5.4.3 Assessment Methodology and Assessment Experience -- 5.5 Assessment of Securities Market Regulation -- 5.5.1 IOSCO Core Principles-Relevance to Stability Considerations and Structural Development -- 5.5.2 Preconditions for Effective Securities Market Regulation -- 5.5.3 Assessment Methodology and Assessment Experience -- 5.5.4 Key Considerations in Conducting an Assessment -- 5.5.5 Assessment Experience -- 5.5.6 Special Topics in Securities Market Development and Regulation -- Annex 5.A Legal and Institutional Environment for Effective Bank Insolvency Procedures -- Autonomy of Banking Authority -- Legal Mandate -- Appropriate Legal Protection of Banking Authorities and Their Staff Members -- Transparency -- Accountability and Judicial Review -- Coordination among Banking Authorities -- Annex 5.B Consolidated Supervision -- Annex 5.C IAIS Insurance Core Principles -- Annex 5.D List of IOSCO Objectives and Principles of Securities Regulation -- Principles Relating to the Regulator -- Principles for Self-Regulation -- Principles for the Enforcement of Securities Regulation -- Principles for Cooperation in Regulation -- Principles for Issuers -- Principles for Collective Investment Schemes -- Principles for Market Intermediaries -- Principles for the Secondary Market -- Annex 5.E IOSCO Methodology -Scope and Use of Principle 8 -- Principle 8 -- Annex 5.F Enforcement and the Exchange of Information -- Notes -- References -- Chapter 6 Assessing the Supervision of Other Financial Intermediaries -- 6.1 Overview -- 6.2 Objectives of the Legal and Regulatory Framework for OFIs.

6.3 Assessing Institutional Structure and Regulatory Arbitrage -- 6.4 Assessing Regulatory Practice and Effectiveness -- 6.5 Selected Issues on the Regulation and Supervision of Leasing Companies -- 6.6 Selected Issues on the Regulation and Supervision of Factoring Companies -- 6.7 Selected Issues on the Regulation and Supervision of Pension Funds -- Annex 6.A Regulation and Supervision of OFIs: A Few Guiding Principles -- A. The regulatory framework should minimize adverse effects on competition and encourage competition -- B. The regulatory framework should clearly define the power of the regulator and the permissible activities of OFIs -- C. Similar risks and functions should be supervised similarly to minimize scope for regulatory arbitrage -- D. The links between OFIs and other players in the financial sector should be closely monitored -- E. The unique risks of OFIs should be recognized within the supervisory structure and when defining prudential norms -- F. Supervision should be proportionate and consistent with costs and benefits -- G. Resources and skills should be targeted to the higher-impact and more-complex OFIs -- H. There should be a strengthening of the self-regulatory capacity -- Notes -- References -- Chapter 7 Rural and Microfinance Institutions: Regulatory and Supervisory Issues -- 7.1 Overview -- 7.2 Rationale for Assessing the Regulatory Framework for Rural Finance and Microfinance Institutions -- 7.3 Institutional Providers of Rural Finance and Microfinance Services -- 7.3.1 Government Rural Finance, Microfinance, or SME Finance Programs or Agencies -- 7.3.2 Non-bank, Non-profit NGO MFIs -- 7.3.3 Membership-Based CFIs -- 7.3.4 Postal Savings Banks -- 7.3.5 Development Finance Institutions -- 7.3.6 Specialized Banking Institutions -- 7.3.7 Commercial Banks.

7.4 Conceptual Framework for the Regulation of Rural Finance and Microfinance Institutions -- 7.5 Assessment of the Regulatory Framework Issues for Rural Finance and Microfinance Institutions -- 7.6 Some Cross-Cutting Issues Affecting Rural Finance and Microfinance Institutions -- 7.7 Ways to Address Rural Finance and Microfinance Regulatory Framework Issues -- 7.8 Consensus Guidelines on Regulating and Supervising Microfinance -- Notes -- References -- Chapter 8 Assessing Financial System Integrity-Anti-Money Laundering and Combating the Financing of Terrorism -- 8.1 AML-CFT Standards-Links to Stability and Institutional Development -- 8.2 AML-CFT Standards-Scope and Coverage -- 8.3 Preconditions for Effective Implementation of AML-CFT Standards -- 8.4 Assessment Methodology and Assessment Experience -- 8.4.1 AML-CFT Assessment Methodology -- 8.4.2 Assessment Experience -- 8.5 Special Topics in AML-CFT Assessments -- 8.5.1 Assessing Preventive Measures: The Example of Customer Due Diligence -- 8.5.2 Financial Intelligence Units -- Annex 8.A FATF 40+8 Recommendations for AML-CFT -- Forty Recommendations -- Special Recommendations for Combating the Financing of Terrorism -- Notes -- References -- Chapter 9 Assessing the Legal Infrastructure for Financial Systems -- 9.1 Financial Sector Legal Faramework -- 9.1.1 Central Banking Law -- 9.1.2 Banking Law -- 9.1.3 Payment Systems -- 9.1.4 Government Debt Management -- 9.1.5 Capital Markets -- 9.1.6 Insurance -- 9.1.7 Financial Safety Nets -- 9.2 Commercial Laws -- 9.2.1 Company Law -- 9.2.2 Corporate Governance -- 9.2.3 Consumer Protection -- 9.3 Creditors Rights and Insolvency Systems -- 9.4 Access to Credit and Land Rights -- 9.5 The Judicial System -- Notes -- References -- Chapter 10 Assessing Information and Governance Infrastructure -- 10.1 Monetary and Financial Policy Transparency.

10.1.1 Code of Good Practices.