December 2004
Terms of Reference for the Conduct of the
Coordinated Compilation Exercise for Financial Soundness Indicators
Background
The increasing focus on financial system stability has led the IMF to undertake a work
program to promote the use and compilation of Financial Soundness Indicators (FSIs) as a
key tool for strengthening macroprudential surveillance of financial systems. At its meeting
in June 2003, to support country compilation efforts, the IMF Executive Board endorsed a
coordinated compilation exercise (CCE) for financial soundness indicators to be carried out
by a group of countries after the finalization of the Compilation Guide on Financial
Soundness Indicators (Guide). The overall aim of this exercise is to develop country capacity
to compile FSIs important to the surveillance of their financial system and to promote
international comparability of FSIs.
Objectives
The objectives of the exercise are twofold:
(1)
To coordinate efforts by national authorities to compile cross-country comparable
FSIs, in line with the principles in the Guide, for use in assessing the strengths and
vulnerabilities of their financial system.
(2)
To disseminate the FSI data compiled along with the metadata to increase
transparency and strengthen market discipline.
Modalities and scope of the exercise
Participation by IMF member countries will be on a voluntary basis. By accepting an
invitation to participate, a country agrees to:
• Compile the following 12 core FSIs as defined in the Guide
Deposit-takers
Regulatory capital to risk-weighted assets
Regulatory Tier I capital to risk-weighted assets
Nonperforming loans to total gross loans
Nonperforming loans net of provisions to capital
Sectoral distribution of loans to total loans
Return on assets
Return on equity
Interest margin to gross income
Noninterest expenses to gross income
Liquid assets to total assets (liquid asset ratio)
Liquid assets to short-term liabilities
Net open position in foreign exchange