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Business and Economics > Public Finance

You are looking at 1 - 10 of 12 items for :

  • Type: Journal Issue x
  • Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies x
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Cover IMF Working Papers
Stepping Up Venture Capital to Finance Innovation in Europe
Nathaniel G Arnold
,
Guillaume Claveres
, and
Jan Frie
Relative to the US, productivity growth and investment in R&D in lagging in the EU, where it is more difficult to finance and scale up promising, innovative startups. Many of the most successful EU startups move elsewhere for financing, causing the EU to lose out on both the direct growth benefits and positive spillovers from these innovative firms. The EU could nurture innovative startups by accelerating the development of its venture capital (VC) ecosystem. Reducing regulatory frictions, especially ones that deter pensions funds and insurers from investing in VC, combined with well-designed tax incentives for R&D investments could help accelerate the development of the VC sector. These and other key CMU initiatives, such as the consolidation of stock markets and reforming and harmonizing insolvency regimes, will take time. Given the urgency to boost innovation, giving public financial institutions like the European Investment Fund a more active and expanded role in kickstarting VC markets where needed and in familiarizing investors with the VC asset class can be a helpful interim step.
Keywords:
Startups; Venture capital; Productivity; Capital Markets Union; EU startup; kickstarting VC market; startup financing stage; EU legislation; VC sector; Pension spending; Stock markets; Mutual funds; Insurance companies; Pensions; Europe
Cover IMF Working Papers
Sovereign Environmental, Social, and Governance (ESG) Investing: Chasing Elusive Sustainability
Ekaterina Gratcheva
and
Bryan Gurhy
This paper evaluates the progression of the sovereign ESG landscape since the initial comprehensive assessment of the sector in 2021 in “Demystifying Sovereign ESG” by conducting a comparative analysis of the current sovereign ESG methodologies of commercial ESG providers. The 2021 study articulated the distinct nature of the sovereign ESG segment from corporate ESG and documented fundamental shortcomings in sovereign ESG methodologies, such as the “ingrained income bias”, lack of consensus on environmental performance, and conflation of risk and sustainability objectives. While sovereign ESG methodologies have evolved since 2021, the significant correlation across providers of aggregate, S, and G scores persist. In response to market demand there has been a notable shift towards greater focus on the E pillar against growing heterogeneity on climate and environmental considerations across ESG providers. The findings underscore the disparity between perceptions and realities in implementing a sustainability strategy within the sovereign debt asset class. This necessitates a reevaluation of sovereign ESG scoring methodologies towards outcome-based metrics and urges a globally coordinated effort to establish robust sustainability measurement frameworks.
Keywords:
ESG; sovereign debt; sovereign ESG scores; sustainability; environmental and climate sustainability; climate financial architecture; ESG provider; ESG methodology; sovereign Environmental, Social, and Governance; ESG landscape; ESG score; Corporate social responsibility; Environmental sustainability; Income; Climate finance; Global; Middle East
Cover IMF Working Papers
The Nonlinear Relationship Between Public Debt and Sovereign Credit Ratings
Metodij Hadzi-Vaskov
and
Mr. Luca A Ricci
This study investigates the nonlinear relationship between public debt and sovereign credit ratings, using a wide sample of over one hundred advanced, emerging, and developing economies. It finds that: i) higher public debt lowers the probability of being placed in a higher rating category; ii) the negative debt-ratings relationship is nonlinear and depends on the rating grade itself; and iii) the identified nonlinearity explains the differential impact of debt on ratings in advanced economies versus in emerging markets and developing economies. These results hold for both gross debt and net debt, and are robust to alternative dependent variable definitions, analytical techniques, and empirical specifications. These findings underscore the potential for fiscal consolidation in helping countries achieve a better credit rating.
Keywords:
WP; rating category; LIG rating; GDP growth; debt-ratings relationship; panel regression; rating grade; Credit ratings; Public debt; Credit rating agencies; Financial markets; Advanced economies; Emerging markets; Non-linearities; NIG rating; credit rating grade; High-Investment Grade; Inflation; Global; Europe; Asia and Pacific; North Africa; Sub-Saharan Africa
Cover IMF Working Papers
Islamic Finance, Consumer Protection, and Financial Stability
Ms. Inutu Lukonga
Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari’ah principles provide a strong foundation for consumer protection, the principles alone cannot provide adequate protection because not all providers are guided by ethical precepts and the practices have deviated from the principles. To safeguard the stability of the Islamic finance industry, consumer protection frameworks that cater to the specifics of Islamic financial products should be an integral part of regulatory frameworks.
Keywords:
WP; consumer vulnerability; banking sector; central bank; investor confidence; Shari'ah-complaint Sukuk; Islamic Finance; Consumer Protection; Financial Stability; Sukuk holder; protection of Sukuk investor; investor protection; Shar'iah principle; liquidation process Sukuk; investor right; asset-backed Sukuk; consumer awareness; Islamic banking; Legal support in revenue administration; Deposit insurance; Global
Cover Building a More Resilient Financial Sector
Building a More Resilient Financial Sector
Reforms in the Wake of the Global Crisis
Mr. Aditya Narain
,
Ms. Inci Ötker
, and
Ceyla Pazarbasioglu

Abstract

The IMF, with the Bank for International Settlements and the Financial Stability Board, has been at the forefront of discussions on reform of the global financial system to reduce the possibility of future crises, as well as to limit the consequences if they do occur. The policy choices are both urgent and challenging, and are complicated by the relationship between sovereign debt and risks to the banking sector. Building a More Resilient Financial Sector describes the key elements of the reform agenda, including tighter regulation and more effective supervision; greater transparency to strengthen market discipline and limit incentives for risk taking; coherent mechanisms for resolution of failed institutions; and effective safety nets to limit the impact on the financial system of institutions viewed as "too big to fail." Finally, the book takes a look ahead at how the financial system is likely to be shaped by the efforts of policymakers and the private sector response.

Keywords:
BOOK; bank; market; financial system; authority; capital; market discipline; group structure; bank capital; parent bank; subsidiary structure; Systemic risk; Systemically important financial institutions; Bank resolution framework; Contingent capital; Commercial banks; Global; Europe; North America; Eastern Europe
Cover IMF Staff Country Reports
Kuwait: Report on Observance of Standards and Codes: FATF Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism
International Monetary Fund
This study provides a summary of the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) measures in Kuwait and the level of compliance with FATF recommendations, and contains how the AML/CFT system could be strengthened. A detailed assessment report (DAR) is prepared. The DAR was adopted by the Middle East and North Africa Financial Action Task Force (MENAFATF). The preventive measures adopted in financial institutions are explained. The National AML/CFT committee and the committee on Combating Terrorism (CCT) are outlined. Various preventive measures are also ascribed in this paper.
Keywords:
ISCR; CR; Anti-Money Laundering; information; AML law; CFT; company; CFT requirement; CFT supervision; exchange organization; CFT compliance officer; Anti-money laundering and combating the financing of terrorism (AML/CFT); Insurance companies; Legal support in revenue administration; Brokers and dealers; Terrorism financing; Middle East; North Africa; East Africa
Cover IMF Staff Country Reports
Kuwait: Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism
International Monetary Fund
In this study, the general situation of money laundering and financing of terrorism is discussed. In addition, the followings are overviewed: financial sector, DNFBP sector, commercial laws and mechanisms governing legal persons, and strategy to prevent money laundering and terrorist financing. A legal framework and criminalization of financing of terrorism are also given. Confiscation, freezing, and seizing are explained under the legal framework. Various preventive measures used are also discussed in this paper. Financial institution secrecy and confidentiality are also outlined.
Keywords:
ISCR; CR; exchange company; AML law; exchange organization; brokerage company; financial market; Anti-money laundering and combating the financing of terrorism (AML/CFT); Insurance companies; Legal support in revenue administration; Brokers and dealers; Money laundering; Middle East; North Africa; East Africa
Cover Policy Papers
Framework Administered Account for Selected Fund Activities-Kingdom of the Netherlands-Netherlands Subaccount for Selected Fund Activities
International Monetary Fund
The Fund, represented by the Managing Director, has reached understandings with the Kingdom of the Netherlands—Netherlands acting through the Ministry of Foreign Affairs, to finance capacity building, training and related activities. On the basis of these understandings, the Managing Director has established the essential terms and conditions of the Subaccount, with which the Kingdom of the Netherlands—Netherlands concurs, with respect to the nature, design, and implementation of the activities to be financed and the method by which the costs of the activities will be financed from the Subaccount.
Keywords:
PP; Subaccount; Netherlands; activities-Kingdom of the Netherlands-Netherlands; fund; fund member; resources of the Subaccount; terms and conditions of the Subaccount; management of the Subaccount; Anti-money laundering and combating the financing of terrorism (AML/CFT); Central America; West Africa; East Africa
Cover Policy Papers
Framework Administered Account for Selected Fund Activities—European Investment Bank Subaccount for Selected Fund Activities
International Monetary Fund
The Fund, represented by the Managing Director, has reached understandings with the EIB to finance capacity building (technical assistance and training) and related activities. On the basis of these understandings, the Managing Director has established the essential terms and conditions of the Subaccount, with which EIB concurs, with respect to the nature, design, and implementation of the activities to be financed and the method by which the costs of the activities will be financed from the Subaccount.
Keywords:
PP; activities-European Investment Bank Subaccount; Subaccount; EIB Subaccount; fund member; resources of the Subaccount; b. EIB; Anti-money laundering and combating the financing of terrorism (AML/CFT); Investment banking; Mutual funds; Project loans; Legal support in revenue administration; Central America; West Africa; East Africa
Cover IMF Working Papers
An Intraday Pricing Model of Foreign Exchange Markets
Rafael Romeu
Market makers learn about asset values as they set intraday prices and absorb portfolio flows. Absorbing these flows causes inventory imbalances. Previous work has argued that market makers change prices to manage incoming flows and offset inventory imbalances. This study argues that they have multiple instruments, or ways to manage inventory imbalances and learn about evolving asset values. Hence, they smooth inventory levels and update prior information about assets using multiple instruments. In ignoring other instruments, previous studies have ignored the information that these provide and overemphasize the role of price changes in inventory management. The model presented here provides new estimates of asymmetric information and inventory effects, the price impact of each instrument, the cost of liquidity, and the impact of an intervention on these costs.
Keywords:
WP; order flow; carrying cost; Foreign Exchange; Microstructure; International Macroeconomics; price change; inventory effect; dealer price appreciation; price impact; inventory cost; Asset valuation; Currency markets; Public investment and public-private partnerships (PPP); Liquidity; Brokers and dealers