Statement of BCSM's Chairman on 2016 IMF Country Report

In its last Article IV staff appraisal report, the IMF strongly recommends to address the health of the banks’ balance sheets. This recommendation confirms and extends the one provided already in the previous report of the preceding year. It identifies the health of the banks’ balance sheets as a threat to the country’s financial stability and beyond to the economy and population welfare. The report insists that dealing with the issue should be at the center of the authorities’ concerns and actions.
The IMF report points out that the first pillar of the strategy to deal with the issue needs to be a thorough stocktaking of the quality of assets on balance sheets in view of determining required appropriate provisioning and if needed recapitalization. The first step is thus what the IMF calls in its report “forward-looking asset quality reviews for all banks (which) should reduce uncertainty about asset quality”. Without adetailed, in depth knowledge of the quality of assets, no sound strategy to solve the problem can be put in place. The Central Bank of San Marino (CBSM)concurs with this assessment and endorses this recommendation. The CBSM is ready to launch a full asset quality review in 2016, performed in accordance with international best practice, in cooperation with the banks. The CBSM aims at reviving the country’s financial system and creating conditions that would enable future healthy and sustainable growth.

Wafik Grais, Chairman, BCSM