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Government Expenditure Arrears: Securitization and Other Solutions
Author:
Mr. Alberto M. Ramos
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Series:
IMF Working Papers
Volume/Issue:
Volume 1998: Issue 070
Language:
English
Publication Date:
01 May 1998
DOI:
https://doi.org/10.5089/9781451849127.001
ISBN:
9781451849127
ISSN:
1018-5941
Pages:
29
Keywords:
WP; aggregate demand; cash budget; government arrears; arrears problem; debt service; immediate payment; Treasury bill holder; BRO countries; Securitization; Russia; payment arrears; securitization operation; Arrears; Securities; Stocks; Treasury bills and bonds; Currencies; Baltics
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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On occasions, by running arrears, governments have unilaterally borrowed from domestic agents. These agents ended up with implicit claims on the government for which they had no title and that would be honored, at best, on an unspecified future date and for an uncertain value. Having untitled assets limits creditors’ financial management capacity, because they cannot trade or enforce these claims. This paper presents several options for addressing the arrears problem. It recommends that the government recognize its implicit financial liabilities, set a timetable for their clearance, and issue market-negotiable titles (securitize). Several country experiences with securitization operations are documented.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund