Norway , together with Denmark , Finland and Poland, has been added to the IMF’s list of countries with financial markets that are ” systemically important ” in the global economy. The list , which was established in 2010, now includes a total of 29 countries. The listed countries’ financial markets must regularly undergo compulsory ” health checks “.
– The experience of the global financial crisis and the government debt crisis in Europe has shown that events in relatively small countries that are highly connected to others can have significant spillovers. Their impact on the global financial system often far exceeds the size of their financial sector or their economy, said Dimitri Demekas, an assistant director in the IMF’s Monetary and Capital Markets Department in a statement on the fund’s own website.
In September 2010, in response to the global crisis, the IMF’s Executive Board agreed the world’s top 25 financial sectors would undergo a mandatory financial check-up every five years. To date, 24 out of the 25 countries or jurisdictions have undergone or will soon undergo their assessments.
Last December, the IMF Board reviewed the methodology that determines whether a country’s financial sector is systemically important. In light of the experience since the crisis, it agreed to place even more emphasis on the connections between financial sectors and institutions, expand the coverage of cross-border linkages to cover not only banking but also equity and debt exposures, and capture the potential for pure price contagion. Based on these revamped criteria, the IMF added the four countries to the original 25.
Of the four new additions to the list, Finland and Poland had financial reviews in 2010 and 2013 respectively. Denmark’s review will take place in 2014 and IMF experts plan to visit Norway in 2015.