Journal Issue

IMF Occasional Papers

International Monetary Fund. Research Dept.
Published Date:
August 2000
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Detailed summaries of IMF Occasional Papers are available at the Research at the IMF website at

IMF Occasional Paper No. 195

The Eastern Caribbean Currency Union: Institutions, Performance, and Policy IssuesFrits van Beek, Jose Roberto Rosales, Mayra Zermeno, Ruby Randall, and Jorge Shepherd

The Eastern Caribbean Central Bank (ECCB) is one of just a few regional central banks in the world and is the only one where member countries pool their foreign reserves, the convertibility of the common currency is self-supported, and the parity of the exchange rate has not changed. The “strong Eastern Caribbean dollar” policy pursued by the ECCB has imposed hard limits on its ability to extend credit to participating governments. As a result, a premium has been placed on fiscal discipline, with most participating governments following prudent fiscal policies.

This paper argues that price and exchange rate stability have also contributed to regional financial system stability. Despite the relatively frequent occurrence of major natural disasters, and the secular decline of key economic activities, the financial systems in the Caribbean have remained stable and virtually free of banking crises.

A detailed summary of this IMF Occasional Paper is available on the IMF website at

IMF Occasional Paper No. 196

Trade and Trade Policies in Eastern and Southern Africa

Arvind Subramanian, Enrique Gerlbard, Richard Harmsen, Katrin Elborgh-Woytek, and Piroska Nagy

This occasional paper analyzes trade and trade policy developments in the countries of Eastern and Southern Africa (ESA) during the 1990s. It describes and quantifies the trade liberalization undertaken by these countries in the area of goods and services, encompassing unilateral and multilateral efforts as well as those undertaken in the context of regional integration initiatives. Drawing upon the experience of individual countries, the paper explores the macroeconomic aspects of trade liberalization, including the factors that have influenced trade liberalization efforts and their impact on macroeconomic performance. Finally, it addresses the main trade policy issues that ESA countries will confront given the impending changes in their external trading environment.

A detailed summary of this IMF Occasional Paper is available on the IMF website at

IMF Occasional Paper No. 197

Deposit Insurance: Actual and Good Practices

Gillian G.H. Garcia

In recent years, a number of countries that faced banking problems gave their banks’ depositors and creditors blanket guarantees; other countries explicitly initiated more limited deposit insurance systems (DIS). All of these countries took steps to try and help stabilize their financial systems, protect consumers, and facilitate economic recovery.

This paper offers guidance on designing or reforming a limited DIS and on placing and removing a full guarantee. To be successful, a DIS must set up a coordinated system of incentives that encourages all parties dealing with banks to keep their financial institutions safe and sound. That is, the system must avoid the pitfalls of moral hazard, adverse selection, political interference, and regulatory capture. This paper also surveys the configurations of 67 presently known DIS and traces a growing movement by countries toward the adoption of good deposit insurance practices.

IMF Occasional Paper No. 198

Setting Up Treasuries in the Baltics, Russia, and Other Countries of the Former Soviet Union

Barry H. Potter and Jack Diamond

Since 1992, the IMF’s Fiscal Affairs Department has supported the Baltics, Russia, and other countries of the former Soviet Union by providing them with technical assistance to set up treasury systems. In most advanced countries, treasury systems provide central governments with comprehensive financial services—including processing of government payments and revenue receipts, accounting, fiscal reporting, and financial management. The countries of the former Soviet Union lacked comparable systems and faced the challenge of building treasury systems from scratch. The IMF helped these countries meet this challenge through specific technical assistance programs.

The IMF conducted a self-evaluation of its technical assistance with a view to assessing: how well the objective of setting up treasuries has been achieved; the relevance and sustainability of the reforms; the costs, efficiency, and effectiveness of the assistance; and the factors that affected the sources (or otherwise) in different countries. This paper presents the findings of this evaluation, looks at the problems that arise when introducing institutional changes in transition economies, and makes broader recommendations on assisting institutional change both in these countries and elsewhere.

A detailed summary of this IMF Occasional Paper is available on the IMF website at

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