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International Monetary Fund

The Global Financial Safety Net (GFSN) is comprised mainly of countries' own reserves and external public sources of insurance and financing. The main external official arrangements are central bank bilateral swap arrangements (BSAs), regional financial arrangements (RFAs), and the Fund. The safety net seeks to provide countries with insurance against crises, financing when shocks hit, and incentives for sound macroeconomic policies.

William Lindquist

Several emerging market central banks in Europe deployed asset purchase programs (APPs) amid the 2020 pandemic. The common main goals were to address market dysfunction and impaired monetary transmission, distinct from the quantitative easing conducted by major advanced economy central banks. Likely reflecting the global nature of the crisis, these APPs defied the traditional emerging market concern of destabilizing the exchange rate or inflation expectations and instead alleviated markets successfully. We uncover some evidence that APPs in European emerging markets stabilized government bond markets and boosted equity prices, with no indication of exchange rate pressure. Examining global and domestic factors that could limit the usability of APPs, in the event of renewed market dysfunction we see a potential scope for scaling up APPs in most European emerging markets that used APPs during the pandemic, provided that they remain consistent with the primary objective of monetary policy and keep a safe distance from the risk of fiscal dominance. As central banks in the region move towards monetary policy tightening, the tapering, ending, and unwinding of APPs must also be carefully considered. Clear and transparent communication is critical at each step of the process, from the inception to the closure of APPs, particularly when a large shock hits and triggers a major policy shift.

International Monetary Fund. Monetary and Capital Markets Department

This paper presents a staff proposal for the Central Bank Transparency Code.

International Monetary Fund

This paper provides background information to the paper “MFD Technical Assistance to Recent Post-Conflict Countries.” The paper presents case studies on eight countries: Afghanistan, Cambodia, the Democratic Republic of the Congo, Iraq, Kosovo, Serbia, Sierra Leone, and Timor-Leste.

Mr. Olaf Unteroberdoerster

This paper reviews recent banking reform efforts in the lower Mekong countries (LMCs), comprising Cambodia, the Lao People's Democratic Republic, and Vietnam. Linked by close economic and cultural ties, the three LMCs face the dual challenge of economic development and transition to market-based economies. Two-tier banking systems were formally introduced in the late 1980s. However, state-owned banks with weak balance sheets continue to dominate the banking systems of Vietnam and Lao P.D.R. Cambodia's main challenge is to reconstruct a banking system after decades of civil strife. Based on progress made and brief cross-country comparisons, the paper identifies key challenges and options for further reform.

International Monetary Fund

The Prime Minister of Japan announced Japan’s willingness to lend up to $100 billion to the Fund to help overcome the current crisis in the lead up to the November 2008 summit of the Leaders of the Group of Twenty. The loan proposed by the Government of Japan would make a substantial contribution to the multilateral effort to ensure the adequacy of the Fund’s financial resources. The Government of Japan intends that the proposed loan be used to support the Fund’s ability to provide timely and effective balance of payments assistance to its members in the current global financial turbulence, including to the emerging market economies that are expected to continue their roles as drivers of global growth.

International Monetary Fund

This report summarizes the findings of an evaluation of the technical assistance delivered by MFD to the CBBH. The assessment was conducted during a visit to Bosnia and Herzegovina during the period March 15–17, 2006. It covers the period 1997–2005, although MFD TA started earlier: two brief MFD staff visits took place in 1996 to assist the authorities in preparing legislation to establish a currency board and create a market-based central bank.

Ms. Julie A Kozack

Assessments regarding the effectiveness of sovereign debt restructurings are often summarized by comparisons of the net present value of debt service before and after the restructuring. These calculations are inherently sensitive to the choice of discount rate. This paper explores issues that arise in selecting discount rates when evaluating sovereign debt restructurings. It suggests using a range of discount rates and centering the analysis around the internal rate of return to assess whether the debt restructuring has generated net present value savings or costs to the debtor.

International Monetary Fund

The medium-term projections of Fund income and precautionary balances accumulation have been updated since the April 2012 projections. The overall income outlook remains positive with continued high lending income expected in the medium-term. The projections indicate a downward shift in the income path primarily due to lower non-lending income as a result of the low global interest rates and the agreement to phase in investments under the new gold-sales funded endowment. The updated expenditure path has not changed significantly. The projections also illustrate a broad balance between income and expenditures when lending returns to pre-crisis levels. The accumulation of precautionary balances remains strong in the medium-term. The indicative medium-term target of SDR 20 billion is now expected to be reached by FY18–FY19.