FSI (Financial Soundness Indicators)

In early 2000, the International Monetary Fund (IMF) initiated the Financial Soundness Indicators (FSI) project in response to the financial market crises of the late 1990s.  This initiative is an attempt to define, with a maximum of consistency, macroprudential indicators for assessing national financial systems in numerous countries and make them available to the general public.

The primary aim of the FSIs is to help make financial systems more transparent, especially in those emerging markets and developing countries for which the availability of such data has hitherto been limited.

In addition, crisis prevention improves through a regular assessment of the situation and risks based on these indicators. The requirement for and regular publication of FSIs by the member countries, expanded the possibility for continuous monitoring of the financial stability, and the possibility to identify the undesirable developments in an early stage. The IMF also uses these indicators in its Article IV consultations and Financial Sector Assessment Programs (FSAP) to assess the stability of its members’ financial systems.

These indicators are composed of two parts: t (i) the "core set", which includes basic indicators for the banking sector and is compulsory for the participating countries; and (ii) the "encouraged set", which also includes, apart from additional supplementary indicators for the banking sector, selected indicators characterising other financial and non-financial institutions, households, market liquidity and the real estate market.

The Bank of Albania is involved in this International Monetary Fund project and provides the entire “core set” (12), and covers at a considerable degree the encouraged set relating to the banking sector (15 out of 18).  Reporting at IMF is done with a monthly frequency

The FSI indicators sent to the International Monetary Fund will also be regularly published on the website of the Bank of Albania together with a concise methodology containing the basic differences to the methodology of the International Monetary Fund and the main differences to similar indicators used by the Bank of Albania.  Data will be updated at the latest 35 (thirty-five) days after the end of the month and 60(sixty) days of the end of the relevant year.

It cannot be entirely ruled out that temporary partial differences may occur between the values of the financial stability indicators presented on the BoA website and the values presented on the IMF website, as any updates to the FSIs (e.g. following an audit) are published on the IMF website with a slight lag.

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