Financial Sector Assessment Program (FSAP)

For over two decades, the Financial Sector Assessment Program (FSAP) has been a cornerstone of global efforts to promote strong, stable, and inclusive financial systems. Jointly launched by the World Bank and the International Monetary Fund (IMF) in 1999, FSAPs helps countries identify and address financial system risks and development challenges—laying the groundwork for sustainable growth, financial resilience, and shared prosperity.

What is the FSAP?

The FSAP provides an independent, in-depth assessment of a country’s financial sector. It has two core objectives:

• Stability: Evaluating the soundness and resilience of financial systems.
• Development: Identifying policy reforms to improve access to finance, support inclusive economic growth, and foster job creation.

Each assessment is tailored to country-specific needs and is conducted by experienced teams from the World Bank and IMF. Together, they examine issues ranging from banking regulation and financial supervision to digital finance, climate risks, and access to credit.

Global Reach

Since the inception of the program in 1999, the World Bank has conducted 270 FSAPs for 121 client countries. 91 percent of IBRD and 77 percent of IDA countries had at least one FSAP. In most emerging and developing countries FSAPs are conducted jointly with the IMF. In smaller economies, the World Bank can also conduct targeted Development Modules to support long-term financial sector deepening. For advanced economies, FSAP are conducted only by the IMF.

How It Works?

FSAP assessments cover:

• Systemic Risk Analysis: Including stress testing, evaluation of crisis response frameworks and safety nets.
• Regulatory and Supervisory Reviews: Often benchmarked against international standards such as the Basel Core Principles for Effective Banking Supervision, IOSCO principles, FATF and IAIS standards.
• Financial Development and Inclusion Diagnostics: Exploring issues like capital market development, Competition, SME financing, and financial inclusion.
• Emerging Issues: Addressing the impact of fintech, cyber risk, and climate-related financial risks.

Each FSAP concludes with tailored policy recommendations and a set of outputs, including Technical Notes, Detailed Assessment Reports (such as Reports on the Observance of Standards and Codes, or ROSCs), and Reports issued by each institution: the World Bank’s Financial Sector Assessment (FSA) and the  IMF’s Financial System Stability Assessment (FSSA). These outputs undergo rigorous internal quality review and are discussed with the authorities, ensuring both technical soundness and transparency.

Why It Matters?

In a fast-changing global economy, resilient and well-regulated financial systems are critical. FSAP helps countries:

• Strengthen crisis preparedness and financial oversight
• Promote inclusive finance and private sector growth
• Align with global financial standards and good practices
• Inform policy reforms with independent, trusted analysis

Public FSAP outputs are widely used by governments, researchers, media, investors, and global standard-setting bodies. The program has become a key platform to track implementation of financial reforms, identify vulnerabilities, and inform global policy—serving as a public good for all stakeholders.

FSAP Today

The FSAP continues to evolve, addressing today’s most pressing challenges—from the financial impacts of global crises to the rapid rise of digital finance. Its joint governance, technical depth, and global perspective ensure that it remains a unique and powerful instrument for promoting financial stability and development worldwide.

Also see IMF’s Financial System Stability Assessment (FSSA)