Pakistan : Financial Sector Assessment
This report summarizes the main findings and policy recommendations within the context of the Financial Sector Assessment Program (FSAP). Considerable progress has been made in macroeconomic stabilization. Real GDP growth has progressively strengthened, inflation has been subdued, and the overall fiscal deficit and public debt, brought down markedly. However, while macroeconomic stabilization has helped limit vulnerabilities, and improve performance in the financial sector, the outlook remains subject to a number of risks, conducive to future credit quality problems. In addition, a widely anticipated rise in interest rates, and tighter liquidity conditions could adversely impact banks' balance sheets. Finally, a change in the domestic or international political environment, could lead to a drying of remittances, which have been unusually high in recent years. Moreover, to consolidate recent structural reforms and protect the system from future policy reversals, the process of privatization and legal reforms needs to continue. The reform process is not equally advanced across all segments of the financial sector. Insurance penetration is very low relative to other countries at Pakistan's income level, reflecting a number of factors, including a history of nationalization and instability, and weak consumer protection and awareness. And, while the securities markets have benefited from recent reforms, a tradition of highly leveraged, speculative trading through the carry over transactions (COT) or "badla" system, coupled with weak supervision of market intermediaries, pose potential systemic risks. Finally, issues regarding the sustainability and oversight of pension systems need to be addressed. Priority recommendations suggest a comprehensive legal and regulatory framework for private occupational and personal pensions, needs to be established, and compliance overseen by the Securities and Exchange Commission of Pakistan (SECP). Reliable data should be collected, including accurate projections on civil service and the Employees Old Age Benefits Institution (EOBI) schemes, to formulate the appropriate reforms that would ensure fiscal sustainability, and long-term balance.
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Bibliographic Details
| Main Author: |
World Bank |
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| Format: | Financial Sector Assessment Program (FSAP)
biblioteca
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| Language: | English
en_US |
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| Published: |
Washington, DC
2005-03
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| Subjects: | ACCOUNTING,
AUDITING,
AUDITS,
AUTONOMY,
BALANCE SHEETS,
BANK CREDIT,
BANK LENDING,
BANK NEGARA MALAYSIA,
BANK OPERATIONS,
BANK SOLVENCY,
BANKING SECTOR,
BANKING SUPERVISION,
BANKING SYSTEM,
BANKRUPTCY,
BANKS,
CAPITAL ACCUMULATION,
CAPITAL ADEQUACY,
CAPITAL CONTROLS,
CAPITAL MARKETS,
CAPITAL REQUIREMENTS,
CENTRAL BANK,
CHECK CLEARING,
COLLATERAL,
COMMERCIAL BANKS,
CONSOLIDATED SUPERVISION,
CONSOLIDATION,
CONTRACT ENFORCEMENT,
CORPORATE GOVERNANCE,
CORPORATE SECTOR,
CORRUPTION,
CURRENT ACCOUNT,
DEBT,
DEBT RESTRUCTURING,
DEVELOPMENT FINANCE,
DEVELOPMENT FINANCE INSTITUTIONS,
DISCLOSURE,
DISTRESSED BANKS,
DOMESTIC LIQUIDITY,
ECONOMIC GROWTH,
EMPIRICAL RESEARCH,
EXCESS LIQUIDITY,
EXPOSURE,
FINANCE COMPANIES,
FINANCIAL DISCIPLINE,
FINANCIAL INSTITUTIONS,
FINANCIAL REPORTING,
FINANCIAL REQUIREMENTS,
FINANCIAL SECTOR,
FINANCIAL SERVICES,
FINANCIAL SYSTEM,
FINANCIAL SYSTEMS,
FOREIGN EXCHANGE,
GROSS SETTLEMENT SYSTEM,
GUIDELINES,
HOUSING,
HOUSING FINANCE,
INCOME,
INFLATION,
INSIDER TRADING,
INSOLVENCY,
INSTITUTIONAL INVESTORS,
INSURANCE,
INSURANCE COMPANIES,
INSURANCE INDUSTRY,
INSURERS,
INTEGRITY,
INTEREST INCOME,
INTEREST RATE,
INTEREST RATE CAPS,
INTEREST RATES,
INTERNATIONAL ACCOUNTING STANDARDS,
INVESTMENT BANKS,
ISLAMIC BANKING,
ISLAMIC FINANCE,
JURISDICTION,
LAWS,
LEASING,
LEASING COMPANIES,
LEGAL FRAMEWORK,
LEGAL PROVISIONS,
LEGISLATION,
LEGISLATIVE FRAMEWORK,
LIQUIDATION,
LIQUIDITY,
MACROECONOMIC STABILIZATION,
MARKET RISK,
MATURITY,
MERGERS,
MICROFINANCE,
MONEY LAUNDERING,
MORTGAGE LENDING,
MUTUAL FUNDS,
NATIONALIZATION,
NATIONALIZED BANKS,
NET INTEREST MARGIN,
NET SETTLEMENT,
NETTING,
NONBANK FINANCIAL INSTITUTIONS,
PAYMENT SYSTEMS,
PENSION PLANS,
PENSIONS,
POLITICAL INTERFERENCE,
PORTFOLIOS,
PRIVATE BANKS,
PRIVATE SECTOR,
PRIVATIZATION,
PROFITABILITY,
PRUDENTIAL REGULATIONS,
PUBLIC BANKS,
PUBLIC DEBT,
REAL TIME GROSS SETTLEMENT,
REGULATORY ENVIRONMENT,
REGULATORY FRAMEWORK,
RETAINED EARNINGS,
RISK MANAGEMENT,
RTGS,
SAVINGS,
SAVINGS SCHEMES,
SECURITIES,
SECURITIES MARKETS,
SETTLEMENT,
SHAREHOLDERS,
SPECIALIZED BANKS,
STATE BANK OF PAKISTAN,
STATE OWNERSHIP,
STOCK EXCHANGES,
STOCK MARKETS,
SUPERVISORY FRAMEWORK,
TRANSPARENCY,
VULNERABILITY,
WARRANTS,
WORKING CAPITAL, |
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| Online Access: | http://documents.worldbank.org/curated/en/2005/03/5704164/pakistan-financial-sector-assessment
http://hdl.handle.net/10986/8529
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