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Business and Economics > Finance: General

You are looking at 1 - 10 of 18 items for :

  • Type: Journal Issue x
  • IMF Policy Discussion Papers x
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Cover IMF Policy Discussion Papers
Islamic Bond Issuance: What Sovereign Debt Managers Need to Know
Mr. Amadou N Sy
,
Mr. Peter J Kunzel
,
Mr. Paul S. Mills
, and
Andreas Jobst
Recent years have witnessed a surge in the issuance of Islamic capital market securities (sukuk) by corporates and public sector entities amid growing demand for alternative investments. As the sukuk market continues to develop, new challenges and opportunities for sovereign debt managers and capital market development arise. This paper reviews the key developments in the sukuk market and informs the debate about challenges and opportunities going forward.
Keywords:
PDP; capital market; asset; investor; issuer; certificate
Cover IMF Policy Discussion Papers
Modernizing China's Growth Paradigm
Mr. Eswar S Prasad
and
Raghuram Rajan
China has achieved tremendous economic progress in the last three decades, but there is much work to be done to make the economy resilient to large shocks, ensure the sustainability of its growth, and translate this growth into corresponding improvements in the economic welfare of its citizens. We discuss the complex challenges that Chinese policymakers face in striking the right balance in terms of speed and coordination of reforms. We argue that China's current stage of development, along with its rising market orientation and increasing integration with the world economy, may make the incremental and piecemeal approaches to reforms increasingly untenable and, in some cases, could even generate risks of their own. The present favorable domestic and external circumstances provide an excellent window of opportunity for bolder reforms and for tackling some deep-rooted problems without causing much economic disruption.
Keywords:
PDP; exchange rate; reform; economy; banking system; state enterprise; Policy reforms; market-oriented economy; trade and financial integration; policy complementarities; reform strategy; banking system's reform effort; state-owned enterprise reform; reform process; reform agenda; a number of reform; market economy; reform of the state enterprises; transition economy; export-led growth; policy reform; Exchange rate flexibility; Commercial banks; Capital account liberalization; Capital controls; Financial sector reform; Global; Eastern Europe
Cover IMF Policy Discussion Papers
Vanishing Contagion?
Mr. Paolo Mauro
,
Tatiana Didier
, and
Mr. Sergio L. Schmukler
While a number of emerging market crises were characterized by widespread contagion during the 1990s, more recent crises (notably, in Argentina) have been mostly contained within national borders. This has led some observers to wonder whether contagion might have become a feature of the past, with markets now better discriminating between countries with good and bad fundamentals. This paper argues that a prudent working assumption is that contagion has not vanished permanently. Available data do not seem to point to a disappearance of the main channels that contribute to transmitting crises across countries. Moreover, anticipation of the Argentine crisis by international investors may help explain the recent absence of contagion.
Keywords:
PDP; crisis; investor; mutual fund; market price; net; crises; international integration; international transmission of shocks; emerging market country; mutual fund holding; ERM crisis; crisis economy; crisis month; Mutual funds; Emerging and frontier financial markets; Hedge funds; Stock markets; East Asia; Eastern Europe
Cover IMF Policy Discussion Papers
Primary Surpluses and sustainable Debt Levels in Emerging Market Countries
Mr. Jonathan David Ostry
and
Mr. Abdul d Abiad
This paper aims to put some constraints on the way primary surpluses are projected when making assessments of public debt sustainability. Projections should be tied either to the country's historical track record in generating surpluses-if the institutional and other factors accounting for this track record are expected to persist-or to some model that links primary surpluses to their fundamental determinants, either on the basis of constant institutions and policies or a credible reform program. History-based or model-based primary surplus projections provide a useful benchmark for judging the realism of fiscal forecasts underlying debt sustainability calculations. Together with information on future growth and interest rates, the primary surplus projections can be used to generate measures of overborrowing, and the magnitude of adjustment needed to return debt to a sustainable level.
Keywords:
PDP; debt; template approach; sc; output gap; sustainable debt; Primary surplus; public debt sustainability; debt level; surplus-generating capacity; underpinning debt sustainability; emerging market country; Fiscal stance; Emerging and frontier financial markets; Debt sustainability analysis; Commodity prices
Cover IMF Policy Discussion Papers
Pension Reform, Investment Restrictions and Capital Markets
Mr. Jorge Roldos
Pension reform in several emerging market countries has been associated with rapid growth in assets under management and a positive impact on the development of local securities markets. However, limitations on such development may lead to asset price distortions, bubbles, and concentration of risks. Regulatory limits on pension fund investments are assessed in light of these risks and developments in modern portfolio theory. A gradual but decisive loosening of restrictions on equity and foreign investments is recommended. Changes in these regulations ought to be coordinated with measures designed to foster the development of local securities markets as well as with macroeconomic policies.
Keywords:
PDP; emerging market; market; asset; portfolio; bond market; capital market; Pension fund regulation; asset allocation; capital market development; institutional investor; pension funds; market participant; a number of emerging market economies; portfolio restriction; Pension spending; Emerging and frontier financial markets; Securities markets; Stock markets; Stocks; Global
Cover IMF Policy Discussion Papers
Issues in the Establishment of Asset Management Companies
Mr. Stefan N Ingves
,
Mr. Steven A. Seelig
, and
Mr. Dong He
This paper discusses the role of asset management companies (AMCs) in facilitating bank restructuring and specifies some policy lessons learned from international experience. The paper concludes that there is no single optimal solution but a combination of strategies that will vary from bank to bank and country to country. There are, however, common factors that contribute to the success of an AMC and these include the legal environment, leadership, independence, incentives, and commercial orientation.
Keywords:
PDP; asset; In Private AMCs; bank; company; loan; bank restructuring; asset management; corporate restructuring; loan restructuring; AMC face; AMC management; AMC's assets; asset recovery; functioning bank; asset portfolio; transactions of the AMC; asset disposition strategy; AMC monopoly; Asset management companies; Distressed assets; Bank resolution; Asset valuation; Asia and Pacific
Cover IMF Policy Discussion Papers
Large and Complex Financial Institutions: Challenges and Policy Responses: Lessons from Sweden
Mr. R. B. Johnston
,
Mr. Balázs Horváth
,
Mr. Luca Errico
, and
Ms. Jingqing Chai
This paper examines the regulatory and supervisory implications stemming from the dominance of large and complex financial institutions, drawing on the recent Financial Sector Assessment Program (FSAP) mission work on Sweden. The analysis highlights the importance of consolidated supervision, of a greater emphasis on effective management and corporate governance structures, and of measures strengthening the disciplinary role of the private sector. It calls for developing credible liquidity and crisis management arrangements through appropriate attention to the cross-product and cross-border nature of large and complex financial institution (LCFI) operations. Strengthened supervisory and regulatory responses will enable financial markets to better assess the nature and sources of residual risks they have to face and, on this basis, to develop more effective risk-mitigating measures.
Keywords:
PDP; Swedish LCFIs; financial institution; solvency support; financial institution solvency; market discipline; Large and complex financial institutions; moral hazard; policy lessons; LCFI operations; systemic importance; business name; market confidence; LCFIs active; LCFI's banking; Stress testing; Financial sector; Baltics
Cover IMF Policy Discussion Papers
Reviving the Case for GDP-Indexed Bonds
Mr. Eduardo Borensztein
and
Mr. Paolo Mauro
This paper seeks to revive the case for countries to self-insure against economic growth slowdowns by issuing GDP-indexed bonds. We simulate the effects of GDP-indexed bonds under different assumptions about fiscal policy reaction functions and their output effects and find that they could substantially reduce the likelihood that debt/GDP paths become explosive. The insurance premium would likely be small, because cross-country comovement of GDP growth rates is low and cross-country GDP growth risk is thus largely diversifiable for an investor holding a portfolio of GDP-indexed bonds. Potential obstacles to the emergence of a market for these bonds include the verifiability of GDP data, the trade-off between insurance and moral hazard, and the need for liquidity. The paper discusses institutional fixes and suggests an approach to attempting to start up a market.
Keywords:
PDP; GDP-indexed bond; GDP growth; plain vanilla; GDP ratio; Emerging markets; GDP-indexed bonds; ratio path; debtor country; GDP indexation; GDP-indexation of bond repayment; Bonds; Inflation-indexed bonds; Emerging and frontier financial markets; Debt default; Global; Africa
Cover IMF Policy Discussion Papers
Privatization in Ukraine: Challenges of Assessment and Coverage in Fund Conditionality
Ms. Katrin Elborgh-Woytek
and
Mr. Mark W Lewis
The paper examines the recent privatization experience in Ukraine in the context of the streamlining of Fund structural conditionality. A particular focus is the shift from privatization-related conditionality based on quantitative targets to conditionality aimed at strengthening privatization procedures. The paper examines how this shift was managed in Ukraine and discusses the challenges of applying conditionality to privatization procedures and the implications for country ownership.
Keywords:
PDP; enterprise; privatization program; government; privatization procedure; Public enterprises; privatization; transition; enterprise restructuring; telecommunications firm Ukrtelecom; privatization conditionality; Stock markets; Eastern Europe
Cover IMF Policy Discussion Papers
The New Approach to Sovereign Debt Restructuring: Setting the Incentives Right
Mr. Carlo A Sdralevich
and
Mr. Biaggio Bossone
The paper discusses key incentive-related issues of the sovereign debt restructuring mechanism recently outlined by the IMF First Deputy Managing Director. The structure of incentives in the mechanism should be consistent with the principle of favoring market-oriented, voluntary solutions to financial crises. The paper frames the mechanism in the context of involving the private sector in financial crisis resolution (PSI), and identifies the conditions for setting up an appropriate incentive structure. The paper explores issues relating to the functioning of the mechanism, including access policy on IMF resources; the power to activate the mechanism; its relation with intermediate PSI instruments; and its impact on investment in emerging markets.
Keywords:
PDP; SDRM phase; SDRM payoff structure; SDRM framework; incentive structure; cost structure; SDRM failure; crisis resolution; private sector involvement; sovereign debt; debt default; Moral hazard; Debt sustainability analysis; Sovereign debt restructuring; Debt restructuring