Public Debt in Developing Countries

Size: px
Start display at page:

Download "Public Debt in Developing Countries"

Transcription

1 Public Debt in Developing Countries Has the Market-Based Model Worked? Indermit Gill and Brian Pinto The World Bank Capital Flows and Global External Imbalances Seminar April

2 In Principle: Government borrowing should facilitate growth by permitting investments in infrastructure and social sectors Debt often superior to taxing money or output Free capital flows should augment resources in developing countries and accelerate growth and convergence.

3 In Practice: 1980s: widespread external debt crisis, took a decade to resolve Early 1990s Brady Plan -18 countries, restructured $200 billion of bank loans into $154 billion in bonds Financial liberalization After mid-1990s: Another round of crises Two new generations of crisis models Things haven t gone too well with sovereign debt and capital account openness.

4 Objective- Answer three questions: What are the chances of another 1980s-type debt crisis? Is public debt constraining growth? What is being done about sovereign debt? Focus: Market Access Countries

5 Table 1. Sovereign Debt -Big MACs and Debt Majors Total Public Debt ($ Billions) Public Debt to GDP (%) India Lebanon China Jamaica Brazil Argentina México Uruguay Korea Jordan Turkey Turkey Indonesia India Russia Pakistan Argentina Morocco Poland Philippines Indonesia Notes: Public and publicly guaranteed external debt and domestic public debt.

6 Approach Survey the literature to develop a conceptual framework Growth theory External capital flows Macroeconomic crises There s not much theory linking sovereign debt and growth. Empirical studies are few and fraught with measurement and econometric problems. Answer the three questions. Debt issues are very country-specific, difficult to generalize.

7 Findings from the Literature Survey MACs do not appear to have used sovereign debt well. External capital flows are more likely to have enhanced vulnerability than growth

8 Why Such Negative Findings? Debt intolerance vs. Original Sin Paucity of suitable instruments Fiscal Space IFI macro framework is wrong Political economy explanations more convincing than pure economic theory, which rules out crises by construction.

9 Table 3. Main Factors Underlying Debt Reduction, Country, Time Period Total Change (% of GDP) Initial Level (% of GDP) Primary Balance Main Contributing Factors (% of GDP) GDP Growth Real Exchange Rate Real Interest Rate Privatization Other Factors Chile, Indonesia, Lebanon, Malaysia, Mexico, Pakistan, Philippines, Poland, Russia, Turkey, Based on Budina, Fiess and others (2004)

10 Debt Reduction Episodes All episodes involve GDP growth as one of the main contributing factors. Two-thirds involve significant primary surpluses; in only one episode, Lebanon , were debt ratios reduced while running a primary deficit. Two-thirds of the episodes involve real exchange rate appreciation.

11 Table 4 Main Factors Underlying Debt Increases, Country, Time Period Total Change (% of GDP) Terminal Level (% of GDP) Primary Balance GDP Growth Main Contributing Factors (% of GDP) Real Exchange Rate Real Interest Rate Contingent Liabilities Debt Indexat ion Other Factors Argentina, Brazil, India, 1997/ / Indonesia, Jamaica, 1997/ / Korea, Lebanon, Malaysia, México, Pakistan, Philippines, Russia, Turkey, Based on Budina, Fiess and others (2004)

12 Debt Increase Episodes All episodes involve real interest or exchange rate changes or both as significant factors Most episodes involve "other factors" such as financial sector bailouts In more than half the cases, the countries ran primary surpluses during these debt run-ups; only in three cases did countries run primary deficits. Economic growth collapses did not play an important part

13 (1) (2) (3) Public Debt and Economic Growth g = g( π, FD) π g ( ) ( ) = f ( g ) σ ( ) g σ g = g + g σ σ, crisis σ, normal g - GDP growth -Inflation FD - fiscal deficit Output volatility (4) d * = d( g, SR( σ g σ ( + ) ( ) )), d * - optimal debt SR - sovereign (or default) risk

14 Sustainability and Solvency Sustainability problem means mix of primary fiscal balances, real interest rates and growth rates is untenable. Market final arbiter of sustainable debt level for MACs. Solvency problem means discounted sum of future primary fiscal surpluses less than initial debt. Insolvency implies unsustainability.

15 Let s Get Real! No objective measure of sustainability. Example: primary deficits and r>g but low debt-to- GDP; or temporary. On the other hand: government may be unhappy -- too much revenue going for interest, short maturities market may be signaling high default and devaluation risk. Unsustainable debt dynamics inextricably tied up with market perceptions and political economy.

16 Potential Responses to Unsustainability Procrastinate (Russia, Argentina) Inflate away debt (Russia, Argentina) Default and restructure (Russia, Argentina) Increase primary surplus, move to flexible exchange rates, reform fiscal and other institutions (E. Asia, Brazil, Turkey).

17 Chances of Another Big Crisis Never say never. But crisis risks have receded since late 1990s. Low international interest rates, encouraging movements in market spreads Moral hazard likely to be lower after Russia Argentina Significant countries running large primary fiscal surpluses, flex exchange rates, move towards domestic debt.

18 Table 6. Economic Indicators Before and After Crisis in Four Big MACs Primary Surplus Interest Payment Net Resource Transfers Real Exchange Rate % of GDP % of GDP US$ bln 1st year = 100 before after before after before after before after Argentina Brazil Russia Turkey Notes: 1. Real exchange rate is bilateral with respect to US$, period average 2. Argentina: before , after ; Brazil: before , after ; Russia: before , after ; Turkey: GNP is used, instead; before , after Net resource transfers are calculated as a net resource flows minus interest on long-term debtand profit remittances on FDI Data are not available for 2003 Source: Staff estimates, Global Development Finance, various issues

19 Growth Being Constrained? Easy answer: yes, based on debt thresholds established by existing studies Yes, if debt sustainability problems (Argentina, Brazil, Jamaica, Lebanon, Turkey) Yes, if debt intolerant and volatile. Yes, if leads to an adverse spending composition (India)

20 What is Being Done? Numerous initiatives, little concrete progress SDRM on hold, CACs appear to be taking off Chance of new instruments remote Most significant: what countries themselves are doing.

21 Conclusions-1 MACs need to pay more attention to the government s inter-temporal budget constraint (different mindset) If debt sustainability problems, negative impact on growth very likely (don t assume you ll grow out of the debt problem) Fiscal space skepticism warranted especially when debt sustainability an issue Fiscal and institutional reform key Vexing problem: How can IFIs help MACs?

22 Conclusions 2 (the three Qs) Crisis risks receding because of what MACs are doing and favorable international conditions Debt constraining growth in MACs where debt sustainability is a problem (Argentina, Brazil, Turkey, Jamaica, Lebanon) or where debt levels have affected spending composition adversely (preceding list plus India) Not much success in international initiatives country-level efforts more significant IFIs should in general encourage MACs to reduce public indebtedness.

23 Thank you!

Latin America s Debt crisis 1980 s

Latin America s Debt crisis 1980 s Latin America s Debt crisis 1980 s The LATAM Debt Crisis of the 80 s Why the region accumulated an unmanageable external debt? What factors precipitated the crisis? How sovereignties and international

More information

International Monetary Policy Transmission Előd Takáts and Abraham Vela Bank for International Settlements. BIS Papers No 78. Carl Musozya.

International Monetary Policy Transmission Előd Takáts and Abraham Vela Bank for International Settlements. BIS Papers No 78. Carl Musozya. International Monetary Policy Transmission Előd Takáts and Abraham Vela Bank for International Settlements. BIS Papers No 78 Carl Musozya. Introduction. Effects of advanced economy monetary policy on the

More information

Managing Systemic Banking Crises. David S. Hoelscher Assistant Director Money and Credit Markets Department

Managing Systemic Banking Crises. David S. Hoelscher Assistant Director Money and Credit Markets Department Managing Systemic Banking Crises David S. Hoelscher Assistant Director Money and Credit Markets Department 2 Introduction Systemic banking crises of unprecedented scale: Argentina, East Asia, Ecuador,

More information

Globalization and Monetary Policy

Globalization and Monetary Policy Globalization and Monetary Policy John B. Taylor Stanford University Fifteenth Cycle of Economic Lectures Banco de Guatemala 22 June 2006 Outline: Three Themes Increased Need for Systematic Strategies

More information

DOMINION GLOBALIZATION WORKSHOP

DOMINION GLOBALIZATION WORKSHOP DOMINION GLOBALIZATION WORKSHOP Financial Sector Dennis Encarnation Harvard University For more information, please contact me at www.encarnation.com SERVICES Financial Services & Capital Markets Topics:

More information

CRISIS RESOLUTION AND INTERNATIONAL DEBT WORKOUT MECHANISMS. Yılmaz Akyüz

CRISIS RESOLUTION AND INTERNATIONAL DEBT WORKOUT MECHANISMS. Yılmaz Akyüz CRISIS RESOLUTION AND INTERNATIONAL DEBT WORKOUT MECHANISMS Presentation made by Yılmaz Akyüz Chief Economist, South Centre, Geneva At the UN Ad Hoc Committee on a Multilateral Legal Framework for Sovereign

More information

Perspectives on Venture Capital and Fixed Income Markets. ChileGlobal Seminar September 26, 2007

Perspectives on Venture Capital and Fixed Income Markets. ChileGlobal Seminar September 26, 2007 Perspectives on Venture Capital and Fixed Income Markets ChileGlobal Seminar September 26, 2007 Today s Discussion: Three Significant Forces for National Economic Growth Venture Capital Fixed Income Markets

More information

Monetary Policy in the Post Crisis Period: The Turkish Perspective

Monetary Policy in the Post Crisis Period: The Turkish Perspective Monetary Policy in the Post Crisis Period: The Turkish Perspective Hakan Kara Economic Research Forum Conference İstanbul April 19, 2013 Outline 1. Motivation of the New Policy Framework 2. New Instruments

More information

Fiscal sustainability, long-term interest rates and debt management

Fiscal sustainability, long-term interest rates and debt management Fiscal sustainability, long-term interest rates and debt management Fabrizio Zampolli Bank for International Settlements Basel A presentation at the Dubrovnik Economic Conference 13-14 June 2013 The opinions

More information

The global economy Banco de Portugal Lisbon, 24 September 2013 Mr. Pier Carlo Padoan OECD Deputy Secretary-General and Chief Economist

The global economy Banco de Portugal Lisbon, 24 September 2013 Mr. Pier Carlo Padoan OECD Deputy Secretary-General and Chief Economist The global economy Banco de Portugal Lisbon, 24 September 213 Mr. Pier Carlo Padoan OECD Deputy Secretary-General and Chief Economist Summary of presentation Global economy slowly exiting recession but

More information

Lecture 12: Benefits of International Financial Integration. Pros and Cons of Open Financial Markets

Lecture 12: Benefits of International Financial Integration. Pros and Cons of Open Financial Markets Lecture 12: Benefits of International Financial Integration Pros and Cons of Open Financial Markets Advantages of financial integration The theory of intertemporal optimization Other advantages Do financial

More information

Recent Developments in Local Currency Bond Markets (LCBMs) 1. October 2013

Recent Developments in Local Currency Bond Markets (LCBMs) 1. October 2013 Recent Developments in Local Currency Bond Markets (LCBMs) 1 October 2013 Given the importance of local currency bond markets (LCBMs), including in the context of the work now underway on financing for

More information

FISCAL POLICY: HAS BRAZIL GRADUATED FROM PRO- CYCLICAL POLICIES? Marcio Holland Secretary of Economic Policy Ministry of Finance, Brazil

FISCAL POLICY: HAS BRAZIL GRADUATED FROM PRO- CYCLICAL POLICIES? Marcio Holland Secretary of Economic Policy Ministry of Finance, Brazil FISCAL POLICY: HAS BRAZIL GRADUATED FROM PRO- CYCLICAL POLICIES? Marcio Holland Secretary of Economic Policy Ministry of Finance, Brazil XXXIX Meeting of the Network of Central Banks and Finance Ministries

More information

FINANCIALISATION AND EXCHANGE RATE DYNAMICS IN SMALL OPEN ECONOMIES. Hamid Raza PhD Student, Economics University of Limerick Ireland

FINANCIALISATION AND EXCHANGE RATE DYNAMICS IN SMALL OPEN ECONOMIES. Hamid Raza PhD Student, Economics University of Limerick Ireland FINANCIALISATION AND EXCHANGE RATE DYNAMICS IN SMALL OPEN ECONOMIES Hamid Raza PhD Student, Economics University of Limerick Ireland Financialisation Financialisation as a broad concept refers to: a) an

More information

Naturally, these difficult external conditions have affected the Mexican economy. I would stress in particular three developments in this regard:

Naturally, these difficult external conditions have affected the Mexican economy. I would stress in particular three developments in this regard: REMARKS BY MR. JAVIER GUZMÁN CALAFELL, DEPUTY GOVERNOR AT THE BANCO DE MÉXICO, ON THE MEXICAN ECONOMY IN AN ADVERSE EXTERNAL ENVIRONMENT: CHALLENGES AND POLICY RESPONSE, SANTANDER MEXICO DAY 2016, Mexico

More information

Efic. Capital outflows from emerging markets revisited. 27 February 2014. Roger Donnelly Chief Economist

Efic. Capital outflows from emerging markets revisited. 27 February 2014. Roger Donnelly Chief Economist Efic Capital outflows from emerging markets revisited 27 February 2014 Roger Donnelly Chief Economist Capital outflows from emerging markets revisited Conclusion We maintain the conclusion we reached last

More information

United States House of Representatives. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises

United States House of Representatives. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises United States House of Representatives Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises Credit Default Swaps on Government Debt: Potential Implications of the Greek Debt

More information

The Determinants of Global Factoring By Leora Klapper

The Determinants of Global Factoring By Leora Klapper The Determinants of Global Factoring By Leora Klapper Factoring services can be traced historically to Roman times. Closer to our own era, factors arose in England as early as the thirteenth century, as

More information

CONTAGION: HOW THE ASIAN CRISIS SPREAD

CONTAGION: HOW THE ASIAN CRISIS SPREAD EDRC Briefing Notes Number 3 ASIAN DEVELOPMENT BANK Economics and Development Resource Center CONTAGION: HOW THE ASIAN CRISIS SPREAD W. Christopher Walker October 1998 CONTAGION: HOW THE ASIAN CRISIS SPREAD

More information

Lazard EMERGING MARKETS EQUITY

Lazard EMERGING MARKETS EQUITY FEATURING Lazard EMERGING MARKETS EQUITY Currently, emerging-markets equities (as measured by the MSCI Emerging Markets Index) have generated higher financial productivity and carry an almost 20 percent

More information

Emerging Markets Fixed Income Capabilities

Emerging Markets Fixed Income Capabilities For professional investors Fixed Income Capabilities Opportunities in a market benefiting from strong fundamentals and increasing demand Fixed Income Capabilities I 2 BNP Paribas Investment Partners BNP

More information

Mexico in the face of slowing emerging economies. Manuel Sánchez

Mexico in the face of slowing emerging economies. Manuel Sánchez Manuel Sánchez Adam Smith Seminar Central Bank of Hungary, Budapest, November 10, 2015 Contents 1 Soft economic rebound 2 Coping with higher risk aversion 3 Tamed inflation 2 Since 2014, global growth

More information

Bond Markets in Emerging Asia: Progress, Challenges, and ADB Work Plan to Support Bond Market Development. Asian Development Bank

Bond Markets in Emerging Asia: Progress, Challenges, and ADB Work Plan to Support Bond Market Development. Asian Development Bank Bond Markets in Emerging Asia: Progress, Challenges, and ADB Work Plan to Support Bond Market Development Asian Development Bank November 2009 A. Noy Siackhachanh Advisor Office of Regional Economic Integration

More information

Currency Crises in Asia and Lain America: A Comparison. Shoji Nishijima. Abstract

Currency Crises in Asia and Lain America: A Comparison. Shoji Nishijima. Abstract Currency Crises in Asia and Lain America: A Comparison Shoji Nishijima Research Institute for Economic and Business Administration, Kobe University 2-1, Rokko, Nada, Kobe, 657-8501 nisijima@rieb.kobe-u.ac.jp

More information

Perspectives on Venture Capital and Fixed Income Markets

Perspectives on Venture Capital and Fixed Income Markets Perspectives on Venture Capital and Fixed Income Markets Parag Saxena International Business Forum on Financing for Development Doha, Qatar, November 2008 Today s Discussion: Three Significant Forces for

More information

DEBT MANAGEMENT OFFICE NIGERIA

DEBT MANAGEMENT OFFICE NIGERIA DEBT MANAGEMENT OFFICE NIGERIA MANAGING NIGERIA S DEBT STOCK Presentation at the Investor/Issuer Education Outreach Programme Organised by Securities and Exchange Commission on July 27, 2011 By Patience

More information

Lecture17 Debt overhang, debt relief and poverty reduction in low-income countries

Lecture17 Debt overhang, debt relief and poverty reduction in low-income countries Master PPD M1 2008 / 2009 Lecture17 Debt overhang, debt relief and poverty reduction in low-income countries Marc Raffinot. LEDa Université Paris Dauphine Outline of the lecture Some facts, with a focus

More information

Sovereign Debt Management Forum 2014

Sovereign Debt Management Forum 2014 FINANCIAL ADVISORY & BANKING Sovereign Debt Management Forum 2014 Background Note for Breakout Session 4 An asset liability management (ALM) framework can help governments to assess risks in the sovereign

More information

Factoring Exchange Rate Policy into your Investment Strategy: Risks Facing Andean Countries

Factoring Exchange Rate Policy into your Investment Strategy: Risks Facing Andean Countries Factoring Exchange Rate Policy into your Investment Strategy: Risks Facing Andean Countries September 2011 Dr. Eliot Kalter President, E M Strategies Senior Fellow, The Fletcher School Ekalter@EMStrategies.com

More information

Debt Management in Pakistan. Samina Shabir

Debt Management in Pakistan. Samina Shabir Debt Management in Pakistan Samina Shabir Introduction Why Debt Management? The current topic is important on account of fact that the growing public debt and resultant rise in debt burden is an issue

More information

BIS CEMLA Roundtable on Fiscal Policy, public debt management and government bond markets: issues for central banks

BIS CEMLA Roundtable on Fiscal Policy, public debt management and government bond markets: issues for central banks BIS CEMLA Roundtable on Fiscal Policy, public debt management and government bond markets: issues for central banks Is monetary policy constrained by fiscal policy? by Carlos Montoro 26-27 November 212

More information

Lecture 7: Savings, Investment and Government Debt

Lecture 7: Savings, Investment and Government Debt Lecture 7: Savings, Investment and Government Debt September 18, 2014 Prof. Wyatt Brooks Problem Set 1 returned Announcements Groups for in-class presentations will be announced today SAVING, INVESTMENT,

More information

Impact of Macroeconomic, Political, and Institutional Factors on the Structure of Government Debt in Emerging Market Countries

Impact of Macroeconomic, Political, and Institutional Factors on the Structure of Government Debt in Emerging Market Countries WP/08/205 Impact of Macroeconomic, Political, and Institutional Factors on the Structure of Government Debt in Emerging Market Countries Anastasia Guscina 2008 International Monetary Fund WP/08/205 IMF

More information

International Economic Relations

International Economic Relations nternational conomic Relations Prof. Murphy Chapter 12 Krugman and Obstfeld 2. quation 2 can be written as CA = (S p ) + (T G). Higher U.S. barriers to imports may have little or no impact upon private

More information

Designing a European Fiscal Union: Lessons from the Experiences of Fiscal Federations

Designing a European Fiscal Union: Lessons from the Experiences of Fiscal Federations Designing a European Fiscal Union: Lessons from the Experiences of Fiscal Federations 1 The Sample 13 federations: Argentina, Australia, Austria, Belgium, Brazil, Canada, Germany, India, Mexico, South

More information

Fiscal consolidation: the Greek case. Dionysios A. Lalountas Directorate of Macroeconomic Policy & Forecasts Ministry of Finance

Fiscal consolidation: the Greek case. Dionysios A. Lalountas Directorate of Macroeconomic Policy & Forecasts Ministry of Finance Fiscal consolidation: the Greek case Dionysios A. Lalountas Directorate of Macroeconomic Policy & Forecasts Ministry of Finance 1 Structure of the presentation Macroeconomic developments before the sovereign

More information

ENDING THE GREEK CRISIS Debt Management and Investment- led Growth

ENDING THE GREEK CRISIS Debt Management and Investment- led Growth NON- PAPER ENDING THE GREEK CRISIS Debt Management and Investment- led Growth SUMMARY The Greek government has recently presented the institutions with its comprehensive reform proposals for completing

More information

Managing the Fragility of the Eurozone. Paul De Grauwe University of Leuven

Managing the Fragility of the Eurozone. Paul De Grauwe University of Leuven Managing the Fragility of the Eurozone Paul De Grauwe University of Leuven Paradox Gross government debt (% of GDP) 100 90 80 70 UK Spain 60 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008

More information

Growth in a Time of Debt

Growth in a Time of Debt American Economic Review: Papers & Proceedings 100 (May 2010): 573 578 http://www.aeaweb.org/articles.php?doi=10.1257/aer.100.2.573 Growth in a Time of Debt By Carmen M. Reinhart and Kenneth S. Rogoff*

More information

"Dollarisation in Emerging Market Economies" Part 2: IMPLICATIONS

Dollarisation in Emerging Market Economies Part 2: IMPLICATIONS Part 2: IMPLICATIONS FISCAL IMPLICATIONS OF CURRENCY SUBSTITUTION DOLLARISATION AND FINANCIAL DEEPENING DOLLARISATION AND FINANCIAL FRAGILITY Solvency risk Liquidity risk Liquidity risk and solvency risk

More information

ECON 4311: The Economy of Latin America. Debt Relief. Part 1: Early Initiatives

ECON 4311: The Economy of Latin America. Debt Relief. Part 1: Early Initiatives ECON 4311: The Economy of Latin America Debt Relief Part 1: Early Initiatives The Debt Crisis of 1982 severely hit the Latin American economies for many years to come. Balance of payments deficits and

More information

The Global Economic Impacts of Oil Price Shocks

The Global Economic Impacts of Oil Price Shocks The Global Economic Impacts of Oil Price Shocks Presented to: Project LINK, United Nations New York, NY November 22, 2004 Presented by: Sara Johnson Managing Director, Global Macroeconomics Group 781-301-9115

More information

Fiscal Unruliness: Checking the Usual Suspects for Jamaica's Debt Buildup

Fiscal Unruliness: Checking the Usual Suspects for Jamaica's Debt Buildup Inter-American Development Bank Country Department Caribbean Group POLICY BRIEF Fiscal Unruliness: Checking the Usual Suspects for Jamaica's Debt Buildup No. IDB-PB-213 Juan Pedro Schmid February 2014

More information

Reporting practices for domestic and total debt securities

Reporting practices for domestic and total debt securities Last updated: 4 September 2015 Reporting practices for domestic and total debt securities While the BIS debt securities statistics are in principle harmonised with the recommendations in the Handbook on

More information

What does the BOP Measure?

What does the BOP Measure? Balance of Payments - Concepts & Accounting Balance of Payments (a flow concept)» What does the BOP measure?» Accounting conventions» Important sub-categories of payments Current account Capital account

More information

Composition of Premium in Life and Non-life Insurance Segments

Composition of Premium in Life and Non-life Insurance Segments 2012 2nd International Conference on Computer and Software Modeling (ICCSM 2012) IPCSIT vol. 54 (2012) (2012) IACSIT Press, Singapore DOI: 10.7763/IPCSIT.2012.V54.16 Composition of Premium in Life and

More information

Bankruptcy law, bank liquidations and the case of Brazil. Aloisio Araujo IMPA, FGV Banco Central do Brasil May 6 th, 2013

Bankruptcy law, bank liquidations and the case of Brazil. Aloisio Araujo IMPA, FGV Banco Central do Brasil May 6 th, 2013 Bankruptcy law, bank liquidations and the case of Brazil Aloisio Araujo IMPA, FGV Banco Central do Brasil May 6 th, 2013 Description of the talk A. Corporate bankruptcy law reform in Brazil How bad is

More information

American Funds Insurance Series. New World Fund. Summary prospectus Class 2 shares May 1, 2015

American Funds Insurance Series. New World Fund. Summary prospectus Class 2 shares May 1, 2015 American Funds Insurance Series New World Fund Summary prospectus Class 2 shares May 1, 2015 Before you invest, you may want to review the fund s prospectus and statement of additional information, which

More information

US Dollar Debt of Emerging Market Firms

US Dollar Debt of Emerging Market Firms US Dollar Debt of Emerging Market Firms Sasha Kofanova, Aaron Walker and Eden Hatzvi* US dollar-denominated borrowings by emerging market (EM) corporations have increased rapidly in recent years, raising

More information

2012 Country RepTrak Topline Report

2012 Country RepTrak Topline Report 2012 Country RepTrak Topline Report The World s View on Countries: An Online Study of the Reputation of 50 Countries RepTrak is a registered trademark of Reputation Institute. Global Reputation Knowledge

More information

The Mexican Economy: Facts and Opportunities

The Mexican Economy: Facts and Opportunities Manuel Sánchez Santander Global Fixed Income Summit London, England, September 20, 2012 Contents 1 Structural features 2 Recent developments and outlook 3 Inflation and monetary policy 4 Economic challenges

More information

DOT) From Theory to Practice. Editors Mila Freire and John Petcrsem with Marcela Huiertas amd Miguel Valadez

DOT) From Theory to Practice. Editors Mila Freire and John Petcrsem with Marcela Huiertas amd Miguel Valadez DOT) From Theory to Practice Editors Mila Freire and John Petcrsem with Marcela Huiertas amd Miguel Valadez c A copublication of the World Bank and Oxford University Press Preface Acknowledgments Abbreviations

More information

The 2002 Uruguayan Financial Crisis: Five Years Later 1. John B. Taylor Hoover Institution Stanford University. May 29, 2007

The 2002 Uruguayan Financial Crisis: Five Years Later 1. John B. Taylor Hoover Institution Stanford University. May 29, 2007 The 2002 Uruguayan Financial Crisis: Five Years Later 1 John B. Taylor Hoover Institution Stanford University May 29, 2007 Thank you for inviting me to Montevideo today. It is a pleasure to be here to

More information

The Political and Economic Impact of Debt: Accelerating Interdependence, Globalization, and the Reallocation of Influence

The Political and Economic Impact of Debt: Accelerating Interdependence, Globalization, and the Reallocation of Influence The Political and Economic Impact of Debt: Accelerating Interdependence, Globalization, and the Reallocation of Influence Australia Brazil China Czech Republic Egypt France Government Debt Germany Greece

More information

In-depth insights from ING Investment Management. Emerging Market Debt: Integrating ESG into the Sovereign Perspective

In-depth insights from ING Investment Management. Emerging Market Debt: Integrating ESG into the Sovereign Perspective For professional use only In-depth insights from ING Investment Management August 2012 FocusPoint Views of the EMD team of ING Investment Management on the importance of gauging country creditworthiness

More information

PROJECTION OF THE FISCAL BALANCE AND PUBLIC DEBT (2012 2027) - SUMMARY

PROJECTION OF THE FISCAL BALANCE AND PUBLIC DEBT (2012 2027) - SUMMARY PROJECTION OF THE FISCAL BALANCE AND PUBLIC DEBT (2012 2027) - SUMMARY PUBLIC FINANCE REVIEW February 2013 SUMMARY Key messages The purpose of our analysis is to highlight the risks that fiscal policy

More information

Overview of Asian Insurance Markets

Overview of Asian Insurance Markets Overview of Asian Insurance Markets Simon Walpole Session Number: TPS2 Joint IACA, IAAHS and PBSS Colloquium in Hong Kong www.actuaries.org/hongkong2012/ Market Ranking in Asia Notes: 1. Colored boxes

More information

A proposal for debt relief among Caribbean SIDS. 17th Meeting of the Monitoring Committee of the CDCC

A proposal for debt relief among Caribbean SIDS. 17th Meeting of the Monitoring Committee of the CDCC A proposal for debt relief among Caribbean SIDS Emerging challenges Region has experienced lower GDP growth since the post crisis period with an average of 1.2% in 2014. ECLAC projects that in 2015 growth

More information

Jornadas Economicas del Banco de Guatemala. Managing Market Risk. Max Silberberg

Jornadas Economicas del Banco de Guatemala. Managing Market Risk. Max Silberberg Managing Market Risk Max Silberberg Defining Market Risk Market risk is exposure to an adverse change in value of financial instrument caused by movements in market variables. Market risk exposures are

More information

The ongoing sovereign debt crisis underlines the need to broaden the scope of debt management co-ordination

The ongoing sovereign debt crisis underlines the need to broaden the scope of debt management co-ordination Evidence from previous post-crisis debt reduction episodes suggests that the advanced economies will on an average take six to eight years to reduce their debt to the pre-crisis levels. Flickr/withassociates

More information

Eighth UNCTAD Debt Management Conference

Eighth UNCTAD Debt Management Conference Eighth UNCTAD Debt Management Conference Geneva, 14-16 November 2011 Debt Resolution Mechanisms: Should there be a Statutory Mechanism for Resolving Debt Crises? by Mr. Hakan Tokaç Deputy Director General

More information

China's debt - latest assessment SUMMARY

China's debt - latest assessment SUMMARY China's debt - latest assessment SUMMARY China s debt-to-gdp ratio continues to increase despite the slowing economy. A convincing case can be made that the situation is manageable: the rate of credit

More information

Emerging Markets Weekly Economic Briefing

Emerging Markets Weekly Economic Briefing 214 Emerging Markets Emerging Markets Weekly Economic Briefing Why rapid debt growth in China might be a risk Is China facing an imminent financial crisis? The rapid expansion of credit in China since

More information

ABF PAN ASIA BOND INDEX FUND An ETF listed on the Stock Exchange of Hong Kong

ABF PAN ASIA BOND INDEX FUND An ETF listed on the Stock Exchange of Hong Kong Important Risk Disclosure for PAIF: ABF Pan Asia Bond Index Fund ( PAIF ) is an exchange traded bond fund which seeks to provide investment returns that corresponds closely to the total return of the Markit

More information

HOUSING FINANCE IN TRANSITION ECONOMIES

HOUSING FINANCE IN TRANSITION ECONOMIES HOUSING FINANCE IN TRANSITION ECONOMIES OECD Workshop Warsaw, Poland December 5-6, 5 2002 Loïc Chiquier The World Bank 1 Challenge in Transition Economies! Key for growth, poverty, wealth (75 wealth),

More information

Introduction to International Finance

Introduction to International Finance Introduction to International Finance Barry W. Ickes Econ 434 Fall 2008 1. Introduction International macroeconomics (or international finance) as a subject covers many topical issues. What has happened

More information

Debt Management in Latin America

Debt Management in Latin America Inter-American Development Bank Department of Research and Chief Economist POLICY BRIEF Debt Management in Latin America How Safe Is the New Debt Composition? No. IDB-PB-109 Eduardo A. Cavallo February

More information

CURRENT ACCOUNT: THE REGIONAL DEVELOPMENTS AND TRENDS

CURRENT ACCOUNT: THE REGIONAL DEVELOPMENTS AND TRENDS CURRENT ACCOUNT: THE REGIONAL DEVELOPMENTS AND TRENDS Prepared by Armenuhi Burnazyan and Arevik Aleksanyan In our project we tried to analyze Current Account (CA) balance trends for Armenia, Georgia and

More information

Sovereign Debt Restructuring: Current Challenges, Future Pathways

Sovereign Debt Restructuring: Current Challenges, Future Pathways Sovereign Debt Restructuring: Current Challenges, Future Pathways Presented by Domenico Lombardi 2015 Money & Banking Conference June 4-5, Buenos Aires Outline A backgrounder on sovereign debt restructuring

More information

THE RETURN OF CAPITAL EXPENDITURE OR CAPEX CYCLE IN MALAYSIA

THE RETURN OF CAPITAL EXPENDITURE OR CAPEX CYCLE IN MALAYSIA PUBLIC BANK BERHAD ECONOMICS DIVISION MENARA PUBLIC BANK 146 JALAN AMPANG 50450 KUALA LUMPUR TEL : 03 2176 6000/666 FAX : 03 2163 9929 Public Bank Economic Review is published bi monthly by Economics Division,

More information

Debt Conversion Development Bonds

Debt Conversion Development Bonds Debt Conversion Development Bonds Mobilizing Domestic Savings to Fund Development This paper was commissioned by UNESCO for the Advisory Panel of Experts on Debt Swaps and Innovative Approaches to Education

More information

Economic Conditions Snapshot, December 2013

Economic Conditions Snapshot, December 2013 McKinsey Global Survey results Economic Conditions Snapshot, December 03 Executives economic expectations have reached a high for the year, though they expect only mild improvements in 04 and anticipate

More information

Lessons learned on debt restructuring in Latin America and the Caribbean. Carlos Steneri October 10, 2013 Wash. DC

Lessons learned on debt restructuring in Latin America and the Caribbean. Carlos Steneri October 10, 2013 Wash. DC Lessons learned on debt restructuring in Latin America and the Caribbean Carlos Steneri October 10, 2013 Wash. DC Recent economic events have instigated the renaissance of an important sequence of sovereign

More information

Income-Tax Free Benefits for Your Heirs and Lifetime Benefits for You. Lifetime Benefits for You

Income-Tax Free Benefits for Your Heirs and Lifetime Benefits for You. Lifetime Benefits for You Indexed Universal Life Insurance 1 Income-Tax Free s for Your Heirs and Lifetime s for You Prepared on August 13, 2013 for by Trusted Advisor Income - 1 Tax Free s for Your Heirs Lifetime s for You Product

More information

Kiel. Policy Brief. The Importance of Investment Income and Transfers in the Current Account: A New Look on Imbalances. Rolf J.

Kiel. Policy Brief. The Importance of Investment Income and Transfers in the Current Account: A New Look on Imbalances. Rolf J. Kiel Policy Brief The Importance of Investment Income and Transfers in the Current Account: A New Look on Imbalances Rolf J. Langhammer No. 48 May 2012 Institut für Weltwirtschaft Kiel Kiel Institute for

More information

Current Account Sustainability in Transition Economies

Current Account Sustainability in Transition Economies November 1997 Current Account Sustainability in Transition Economies Nouriel Roubini Stern School of Business, New York University and Paul Wachtel Stern School of Business, New York University and Institute

More information

Global Effective Tax Rates

Global Effective Tax Rates www.pwc.com/us/nes Global s Global s April 14, 2011 This document has been prepared pursuant to an engagement between PwC and its Client. As to all other parties, it is for general information purposes

More information

The FDI regime in Brazil has been fairly open during the last decades. Except in specific situations in the legislation or as a manner to circumvent

The FDI regime in Brazil has been fairly open during the last decades. Except in specific situations in the legislation or as a manner to circumvent The FDI regime in Brazil has been fairly open during the last decades. Except in specific situations in the legislation or as a manner to circumvent FDI limitations, there is no distinction between established

More information

THE SUSTAINABILITY OF ROMANIA S EXTERNAL DEBT DURING THE RECENT FINANCIAL CRISIS

THE SUSTAINABILITY OF ROMANIA S EXTERNAL DEBT DURING THE RECENT FINANCIAL CRISIS THE SUSTAINABILITY OF ROMANIA S EXTERNAL DEBT DURING THE RECENT FINANCIAL CRISIS Sorin Calea * Ioana Mihut ** Mihaela Lutas *** Abstract: Between the sustainability of the current account deficit and the

More information

THE DEBT ISSUE AMONG MIDDLE INCOME COUNTRIES: HOW TO RESOLVE THE CHALLENGES (WITH SPECIAL REFERENCE TO THE CARIBBEAN)

THE DEBT ISSUE AMONG MIDDLE INCOME COUNTRIES: HOW TO RESOLVE THE CHALLENGES (WITH SPECIAL REFERENCE TO THE CARIBBEAN) THE DEBT ISSUE AMONG MIDDLE INCOME COUNTRIES: HOW TO RESOLVE THE CHALLENGES (WITH SPECIAL REFERENCE TO THE CARIBBEAN) E V E R T O N M C F A R L A N E M I N I S T R Y O F F I N A N C E & P L A N N I N G,

More information

Asian Development Bank

Asian Development Bank ERD POLICY BRIEF SERIES Economics and Research Department Number 7 Causes of the 1997 Asian Financial Crisis: What Can an Early Warning System Model Tell Us? Juzhong Zhuang Malcolm Dowling Asian Development

More information

Data Modeling & Bureau Scoring Experian for CreditChex

Data Modeling & Bureau Scoring Experian for CreditChex Data Modeling & Bureau Scoring Experian for CreditChex Karachi Nov. 29 th 2007 Experian Decision Analytics Credit Services Help clients with data and services to make business critical decisions in credit

More information

Public Debt Management and Fiscal Vulnerability: Potential Roles for SAIs. INTOSAI Public Debt Committee

Public Debt Management and Fiscal Vulnerability: Potential Roles for SAIs. INTOSAI Public Debt Committee Public Debt Management and Fiscal Vulnerability: Potential Roles for SAIs INTOSAI Public Debt Committee February, 2003 1 Public Debt Management and Fiscal Vulnerability: Potential Roles for SAIs There

More information

Diminished Expectations, Double Dips, and External Shocks: The Decade After the Fall

Diminished Expectations, Double Dips, and External Shocks: The Decade After the Fall MPRA Munich Personal RePEc Archive Diminished Expectations, Double Dips, and External Shocks: The Decade After the Fall Carmen Reinhart and Vincent Reinhart University of Maryland, College Park, Department

More information

2015 Country RepTrak The World s Most Reputable Countries

2015 Country RepTrak The World s Most Reputable Countries 2015 Country RepTrak The World s Most Reputable Countries July 2015 The World s View on Countries: An Online Study of the Reputation of 55 Countries RepTrak is a registered trademark of Reputation Institute.

More information

STABILITY PROGRAMME 2014-2017

STABILITY PROGRAMME 2014-2017 STABILITY PROGRAMME 2014-2017 COUNCIL OF MINISTERS APRIL 30 2014 Stability Programme 2014-2017 The Council of Ministers has approved today the referral to Brussels of: The Stability Programme 2014-2017,

More information

FINANCIAL DOMINANCE MARKUS K. BRUNNERMEIER & YULIY SANNIKOV

FINANCIAL DOMINANCE MARKUS K. BRUNNERMEIER & YULIY SANNIKOV Based on: The I Theory of Money - Redistributive Monetary Policy CFS Symposium: Banking, Liquidity, and Monetary Policy 26 September 2013, Frankfurt am Main 2013 FINANCIAL DOMINANCE MARKUS K. BRUNNERMEIER

More information

PUBLIC DEBT SIZE, COST AND LONG-TERM SUSTAINABILITY: PORTUGAL VS. EURO AREA PEERS

PUBLIC DEBT SIZE, COST AND LONG-TERM SUSTAINABILITY: PORTUGAL VS. EURO AREA PEERS PUBLIC DEBT SIZE, COST AND LONG-TERM SUSTAINABILITY: PORTUGAL VS. EURO AREA PEERS 1. Introduction This note discusses the strength of government finances in, and its relative position with respect to other

More information

Appendix 1: Full Country Rankings

Appendix 1: Full Country Rankings Appendix 1: Full Country Rankings Below please find the complete rankings of all 75 markets considered in the analysis. Rankings are broken into overall rankings and subsector rankings. Overall Renewable

More information

Asian Development Bank Institute. ADBI Working Paper Series

Asian Development Bank Institute. ADBI Working Paper Series ADBI Working Paper Series Is It Desirable for Asian Economies to Hold More Asian Assets in Their Foreign Exchange Reserves? The People s Republic of China s Answer Bin No. 306 August 2011 Asian Development

More information

EXTERNAL DEBT AND LIABILITIES OF INDUSTRIAL COUNTRIES. Mark Rider. Research Discussion Paper 9405. November 1994. Economic Research Department

EXTERNAL DEBT AND LIABILITIES OF INDUSTRIAL COUNTRIES. Mark Rider. Research Discussion Paper 9405. November 1994. Economic Research Department EXTERNAL DEBT AND LIABILITIES OF INDUSTRIAL COUNTRIES Mark Rider Research Discussion Paper 9405 November 1994 Economic Research Department Reserve Bank of Australia I would like to thank Sally Banguis

More information

Financial Crisis and the fluctuations of the global crude oil prices and their impacts on the Iraqi Public Budget Special Study

Financial Crisis and the fluctuations of the global crude oil prices and their impacts on the Iraqi Public Budget Special Study Financial Crisis and the fluctuations of the global crude oil prices and their impacts on the Iraqi Public Budget Special Study Dr.Ahmed-Al-Huseiny* ABSTRACT The Iraqi economy is not isolated from the

More information

The Case for International Fixed Income

The Case for International Fixed Income The Case for International Fixed Income June 215 Introduction Investing in fixed-income securities outside of the United States is often perceived as a riskier strategy than deploying those assets domestically,

More information

CAN INVESTORS PROFIT FROM DEVALUATIONS? THE PERFORMANCE OF WORLD STOCK MARKETS AFTER DEVALUATIONS. Bryan Taylor

CAN INVESTORS PROFIT FROM DEVALUATIONS? THE PERFORMANCE OF WORLD STOCK MARKETS AFTER DEVALUATIONS. Bryan Taylor CAN INVESTORS PROFIT FROM DEVALUATIONS? THE PERFORMANCE OF WORLD STOCK MARKETS AFTER DEVALUATIONS Introduction Bryan Taylor The recent devaluations in Asia have drawn attention to the risk investors face

More information

Lecture 1: current account - measurement and theory

Lecture 1: current account - measurement and theory Lecture 1: current account - measurement and theory What is international finance (as opposed to international trade)? International trade: microeconomic approach (many goods and factors). How cross country

More information

FINANCIAL CRISES AND ITS IMPACT ON THE FINANCIAL SYSTEM. Lecturer Oleg Deev oleg@mail.muni.cz

FINANCIAL CRISES AND ITS IMPACT ON THE FINANCIAL SYSTEM. Lecturer Oleg Deev oleg@mail.muni.cz FINANCIAL CRISES AND ITS IMPACT ON THE FINANCIAL SYSTEM Lecturer Oleg Deev oleg@mail.muni.cz Essential readings 1. Geisst, C.R. (2009). Globalization and the US Financial System. US Department of State

More information

The Nineteenth Dubrovnik Economic Conference

The Nineteenth Dubrovnik Economic Conference The Nineteenth Dubrovnik Economic Conference Organized by the Croatian National Bank Sergio Schmukler Capital Market Development in Emerging Economies: Challenges Ahead Hotel "Grand Villa Argentina", Dubrovnik

More information

An Overview of Offshore RMB Market. Nov 2013

An Overview of Offshore RMB Market. Nov 2013 An Overview of Offshore RMB Market Nov 2013 Contents 1. Outlook of RMB Internationalisation 2. Implications for Offshore RMB Bonds 2 Section 1 Outlook of RMB Internationalisation 3 RMB The next international

More information

Consumer Credit Worldwide at year end 2012

Consumer Credit Worldwide at year end 2012 Consumer Credit Worldwide at year end 2012 Introduction For the fifth consecutive year, Crédit Agricole Consumer Finance has published the Consumer Credit Overview, its yearly report on the international

More information

Anti-Crisis Stimulus Package for Economic Recovery

Anti-Crisis Stimulus Package for Economic Recovery Anti-Crisis Stimulus Package for Economic Recovery (Developing Efficient State Debt Management Policy) The project is implemented in the framework of The East-West Management Institute s (EWMI) Policy,

More information