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Western Hemisphere > Belize

You are looking at 1 - 10 of 33 items for :

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Cover Policy Papers
Debt for Development Swaps: An Approach Framework
International Monetary Fund. Strategy, Policy, & Review Department
and
World Bank
The aim of this note is to help stakeholders optimize their decision-making on when, where, and how to use debt-for-development swaps (“debt swaps”), ensuring they bring the intended benefits to all parties involved. It also proposes new approaches to structure these mechanisms, making them less transaction-heavy and more sustainable while maintaining accountability for fulfilling policy and spending commitments. Debt swaps are agreements between a government and one or more of its creditors to replace existing sovereign debt with one or more liabilities1 that include a spending commitment towards a specific development goal. These goals may include nature conservation, climate action, education, nutrition, support for refugees, among others. The spending commitment is often associated with the country's decision to pursue an important development policy.
Keywords:
spending commitment; expenditure efficiency perspective; transparency policy; expenditure program commitment; expenditure commitment; debt sustainability prospect; debt amortization profile; Debt conversion; Debt service; Debt management; Debt sustainability; Global
Cover IMF Working Papers
Debt-for-Climate Swaps: Analysis, Design, and Implementation
Mr. Marcos d Chamon
,
Erik Klok
,
Mr. Vimal V Thakoor
, and
Mr. Jeromin Zettelmeyer
This paper compares debt-for-climate swaps—partial debt relief operations conditional on debtor commitments to undertake climate-related investments—to alternative fiscal support instruments. Because some of the benefits of debt-climate swaps accrue to non-participating creditors, they are generally less efficient forms of support than conditional grants and/or broad debt restructuring (which could be linked to climate adaptation when the latter significantly reduces credit risk). This said, debt-climate swaps could be superior to conditional grants when they can be structured in a way that makes the climate commitment de facto senior to debt service; and they could be superior to comprehensive debt restructuring in narrow settings, when the latter is expected to produce large economic dislocations and the debt-climate swap is expected to materially reduce debt risks (and achieve debt sustainability). Furthermore, debt-climate swaps could be useful to expand fiscal space for climate investment when grants or more comprehensive debt relief are just not on the table. The paper explores policy actions that would benefit both debt-climate swaps and other forms of climate finance, including developing markets for debt instruments linked to climate performance.
Keywords:
Debt-for-climate swaps; climate mitigation; climate adaptation; climate finance; fiscal space; debt; NDCs; climate swap; debt risk; Debt-Climate swap; IMF working papers; climate investment; Debt conversion; Debt relief; Debt restructuring; Debt service; Global; debt swap operation; trilateral debt swaps; financial support; debt relief debt swap
Cover IMF Working Papers
Long-Term Returns in Distressed Sovereign Bond Markets: How Did Investors Fare?
Mr. Jochen R. Andritzky
and
Julian Schumacher
Sovereign debt restructurings are perceived as inflicting large losses to bondholders. However, many bonds feature high coupons and often exhibit strong post-crisis recoveries. To account for these aspects, we analyze the long-term returns of sovereign bonds during 32 crises since 1998, taking into account losses from bond exchanges as well as profits before and after such events. We show that the average excess return over risk-free rates in crises with debt restructuring is not significantly lower than the return on bonds in crises without restructuring. Returns differ considerably depending on the investment strategy: Investors who sell during crises fare much worse than buy-and-hold investors or investors entering the market upon signs of distress
Keywords:
WP; excess return; crisis episode; debt crisis; distress investor; net present value; public debt; sovereign risk; sovereign default; bond restructuring; period return; return index; investor type; long-term return; investment strategy; longer-term return; market value; returns in sovereign bond bond market; bond investor; buy-and-hold investor; Bonds; Sovereign bonds; Debt restructuring; Crisis resolution; Global
Cover IMF Working Papers
Costs of Sovereign Defaults: Restructuring Strategies, Bank Distress and the Capital Inflow-Credit Channel
Mr. Tamon Asonuma
,
Mr. Marcos d Chamon
,
Aitor Erce
, and
Akira Sasahara
Sovereign debt restructurings are associated with declines in GDP, investment, bank credit, and capital flows. The transmission channels and associated output and banking sector costs depend on whether the restructuring takes place preemptively, without missing payments to creditors, or whether it takes place after a default has occurred. Post-default restructurings are associated with larger declines in bank credit, an increase in lending interest rates, and a higher likelihood of triggering a banking crisis than pre-emptive restructurings. Our local projection estimates show large declines in GDP, investment, and credit amplified by severe sudden stops and transmitted through a “capital inflow-credit channel”.
Keywords:
WP; net capital; growth rate; banking sector; Sovereign Debt; Sovereign Defaults; Sovereign Debt Restructurings; GDP Growth; Investment; Banking Crisis; Local Projection; debt restructuring; net capital capital inflow; default restructuring; inflows-to-GDP ratio; Debt restructuring; Capital inflows; Sudden stops; Banking crises; Credit; Global
Cover IMF Staff Country Reports
Belize: Selected Issues Paper
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper analyzes Belize’s correspondent banking relationships (CBR). All affected banks have found some replacements CBRs and alternative ways of processing cross border transactions. The analysis uses a dataset based on a bank-level survey and the IMF staff’s minimum scope framework. Pressures from the loss of correspondent banking relationships appeared to be easing. The US dollar continued to dominate CBR transactions, but its share has been declining. CBR pressures appear to be easing but risks remain. Risks include CBR counterparty credit risk and withdrawal risk, in addition to remaining supervisory gaps which could potentially add to CBR pressures. The importance of CBR in supporting economic activity and financial stability is highlighted in several studies. The results of the study results are consistent with the view that the recovery in CBRs in Belize will support credit growth and economic activity. Ensuring the availability and timely access to beneficial ownership of legal persons and arrangements established in Belize would limit the opportunity for their misuse and improve the transparency and the reputation of the sector.
Keywords:
ISCR; CR; Belizean bank; risks tolerance policy; CBR account; payment flow; corresponded bank; CBR activity; Correspondent banking; Anti-money laundering and combating the financing of terrorism (AML/CFT); International banking; Foreign banks; Global; Caribbean
Cover IMF Working Papers
Belize's 2016-17 Sovereign Debt Restructuring - Third Time Lucky?
Mr. Tamon Asonuma
,
Mr. Michael G. Papaioannou
,
Eriko Togo
, and
Mr. Bert van Selm
This paper examines the causes, processes, and outcomes of Belize’s 2016–17 sovereign debt restructuring—its third episode in last 10 years. As was the case in the earlier two restructurings, in 2006–07 and in 2012–13, the 2016–17 debt restructuring was executed through collaborative engagement with creditors outside an IMF-supported program. While providing liquidity relief and partially addressing long-term debt sustainability concerns, the restructuring will need to be underpinned by ambitious fiscal consolidation and growth-enhancing structural reforms to secure durable gains.
Keywords:
WP; debt; Belize; restructuring experience; Sovereign Debt; Sovereign Defaults; Sovereign Debt Restructurings; Serial Debt Restructurings; restructuring process; debt sustainability concern; NPV haircut; debt portfolio risk; IMF engagement; Belize bond price; restructuring approach; U.S. dollar; face value; coupon rate; amendment terms; debt restructuring process; Debt restructuring; Bonds; Sovereign debt restructuring; Fiscal consolidation; Caribbean
Cover Unleashing Growth and Strengthening Resilience in the Caribbean
Unleashing Growth and Strengthening Resilience in the Caribbean

Abstract

This book provides a diagnosis of the central economic and financial challenges facing Caribbean policymakers and offers broad policy recommendations for promoting a sustained and inclusive increase in economic well-being. The analysis highlights the need for Caribbean economies to make a concerted effort to break the feedback loops between weak macroeconomic fundamentals, notably pertaining to fiscal positions and financial sector strains, and structural impediments, such as high electricity costs, limited financial deepening, violent crime, and brain drain, which have depressed private investment and growth. A recurring theme in the book is the need for greater regional coordination in finding solutions to address the Caribbean’s shared and intertwined macroeconomic and structural challenges. The analysis suggests that strengthening regional and global market integration of Caribbean economies would provide an impetus to sustained growth in incomes and jobs. Greater regional and global economic integration would also facilitate structural transformation and a shift toward new economic activities, resulting in more diversified and less vulnerable economies. A central challenge for the Caribbean is thus to come together as a region, overcome the limitations posed by size, and garner the benefits of globalization. Efforts should build on existing regional arrangements; accelerating progress in implementing these agreements would stimulate trade. Policymakers could also promote deeper integration with Latin America and the rest of the world by pursuing new trade agreements, leveraging current agreements more effectively, or deepening them to include areas beyond traditional trade issues, and developing port and transport infrastructure.

Keywords:
BOOK; cost; bank; Caribbean economy; respondent bank; firm employment distribution; tourism flow; World Bank enterprise Survey; Nonperforming loans; Tax incentives; Natural disasters; Correspondent banking; Caribbean; Global; Central America; Europe
Cover IMF Working Papers
Loss of Correspondent Banking Relationships in the Caribbean: Trends, Impact, and Policy Options
Mr. Trevor Serge Coleridge Alleyne
,
Mr. Jacques Bouhga-Hagbe
,
Mr. Thomas Dowling
,
Dmitriy Kovtun
,
Ms. Alla Myrvoda
,
Mr. Joel Chiedu Okwuokei
, and
Mr. Jarkko Turunen
Banks across the Caribbean have lost important Correspondent Banking Relationships (CBRs). The macroeconomic impact has so far been limited, in part because banks either have multiple relationships or have been successful in replacing lost CBRs. However, the cost of services has increased substantially, some services have been cut back, and some sectors have experienced reduced access. Policy options to address multiple drivers, including lower profitability and risk aversion by global banks, require tailored actions by several stakeholders.
Keywords:
WP; respondent bank; BIS bank liability; bank service; CBR transaction; central bank; Caribbean; small states; corrrespondent banking; AML/CFT; remittances; fintech; loss of CBR; banks in the Caribbean; Correspondent banking; Anti-money laundering and combating the financing of terrorism (AML/CFT); Offshore financial centers; Commercial banks; Compliance costs; Global
Cover IMF Working Papers
Public Investment Scaling-up and Debt Sustainability: The Case of Energy Sector Investments in the Caribbean
Ahmed El-Ashram
The question of how scaling up public investment could affect fiscal and debt sustainability is key for countries needing to fill infrastructure gaps and build resilience. This paper proposes a bottom-up approach to assess large public investments that are potentially self-financing and reflect their impact in macro-fiscal projections that underpin the IMF’s Debt Sustainability Analysis Framework. Using the case of energy sector investments in Caribbean countries, the paper shows how to avoid biases against good projects that pay off over long horizons and ensure that transformative investments are not sacrificed to myopic assessments of debt sustainability risks. The approach is applicable to any macro-critical investment for which user fees can cover financing costs and which has the potential to raise growth without crowding-out.
Keywords:
WP; cost saving; energy investment; investment project; investment scaling-up; management framework; Public Investment; Debt Sustainability; Growth; Energy Reform; Caribbean; User Fees; Public investment spending; Public investment and public-private partnerships (PPP); Public sector
Cover Policy Papers
Recent Trends in Correspondent Banking Relationships: Further Considerations
International Monetary Fund
Correspondent banking relationships (CBRs), which facilitate global trade and economic activity, have been under pressure in several countries. So far, cross-border payments have remained stable and economic activity has been largely unaffected, despite a recent slight decrease in the number of CBRs. However, in a limited number of countries, financial fragilities have been accentuated as their cross-border flows are concentrated through fewer CBRs or maintained through alternative arrangements. These fragilities could undermine affected countries’ long-run growth and financial inclusion prospects by increasing costs of financial services and negatively affecting bank ratings.
Keywords:
PP; respondent bank; CBR withdrawal; due diligence; risk tolerance; payment flow; risk appetite; central bank; Correspondent banking; Anti-money laundering and combating the financing of terrorism (AML/CFT); Remittances; Foreign banks; Compliance costs; Global; Caribbean