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Although keeping bank supervision independent from macroprudential supervision may ensure more checks and balances, placing bank supervision in the central bank could exploit synergies with macroprudential supervision. This paper studies whether placing microprudential supervision of banks, typically the systemic part of the financial system, under the same roof as financial stability policy, typically entrusted to the central bank, can improve financial stability. Specifically, the paper analyzes whether having bank supervision in the central bank mitigated the likelihood of banking crises during 2007–12. The analysis conditions on crisis indicators commonly found in the early-warning models of banking crises, the quality of microprudential supervision, and the quality of macroprudential supervision. The authors find that countries with deeper financial markets and those undergoing rapid financial deepening can better foster financial stability when they put bank supervision in the central bank.

Although Moldova has made some important advances since the 2008 FSAP update, risks to banking sector stability have become severe. There is an urgent need, therefore, to improve transparency and governance in the banking system. Although the banking sector appears to be well capitalized and liquid, important pockets of weakness remain and vulnerabilities may be masked by fraud or misreporting. The two securities settlement systems are in need of updating, though plans to take this reform forward are not finalized. Weaknesses in the insolvency and creditor or debtor regime create uncertainty and may deter some stakeholders from engaging in financial transactions. Especially in light of the weaknesses described above and recent geopolitical uncertainties, urgent action is needed to address these and mitigate the risks to which the financial system appears to be exposed.

The bank insolvency framework in Poland should be modernized to ensure financial stability, maintain the continuity of critical functions in the banking system, and protect depositors and creditors, while assigning losses according to a pre-established creditor hierarchy. Several country experiences in Europe and elsewhere have demonstrated the effectiveness of new bank resolution measures by the European commission. A key aspect of the resolution process is for the authorities to swiftly assess and revalue the balance sheet of the intervened bank. Other particularities of modern resolution procedures relate to maintaining the integrity of secured financial contracts to prevent disruptions in financial market transactions including in payments and settlements systems. The treatment of systemically important institutions should rely on extraordinary resolution tools which are necessary if a bank is too large to be purchased or for its liabilities to be readily assumed. The purpose of this paper is thus to describe and recommend new features that can be added to strengthen the Polish legislation for handling commercial bank insolvencies. The paper focuses on the legal issues related to insolvency of banks (including commercial banks and cooperative banks). The banking sector's share in the total assets of the credit sector amounts to 89 percent while cooperative banks control 6 percent. The only wholly-owned state bank is the development bank Bank Gospodarstwa Krajowego (BGK) which is subject to supervision by the Polish Financial Supervisory Authority (KNF).

This assessment of the Basel Core Principles (BCP) was conducted as part of the financial sector assessment program (FSAP) update evaluation of the El Salvador financial system from April 22 to May 10, 2010. The supervisory framework was assessed against the BCP methodology issued in October 2006. The assessment of compliance with each principle is made on a qualitative basis. A four-part assessment system is used: compliant; largely compliant; materially noncompliant; and noncompliant. A largely compliant assessment is given if only minor shortcomings are observed, and these are not seen as sufficient to raise serious doubts about the authority's ability to achieve the objective of that principle. A materially noncompliant assessment is given when the shortcomings are sufficient to raise doubts about the authority's ability to achieve compliance, but substantive progress has been made. A noncompliant assessment is given when no substantive progress toward compliance has been achieved. The ratings assigned during this assessment are not comparable to the ones assigned in the 2000 FSAP, as the bar to measure the effectiveness of a supervisory framework has been raised in the new methodology. This paper is structures as follows: introduction; information and methodology used for assessment; institutional and macroeconomic setting and market structure- overview; preconditions for effective bank supervision; main findings; and recommended action plan and authorities' response.