Is Banks Home Bias Good Or Bad For Public Debt Sustainability

Author : Mr.Tamon Asonuma,Mr.Said Bakhache,Mr.Heiko Hesse
Publisher : International Monetary Fund
Page : 37 pages
File Size : 47,7 Mb
Release : 2015-02-27
Category : Business & Economics
ISBN : 9781498323505

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Is Banks’ Home Bias Good or Bad for Public Debt Sustainability? by Mr.Tamon Asonuma,Mr.Said Bakhache,Mr.Heiko Hesse Pdf

Motivated by the recent increase in domestic banks’ holdings of domestic sovereign debt (i.e., home bias) in the European periphery, this paper analyzes implications of banks’ home bias for the sovereign’s debt sustainability. The main findings, based on a sample of advanced (AM) and emerging market (EM) economies, suggest that home bias generally reduces the cost of borrowing for AMs and EMs when debt levels are moderate to high. A worsening of market sentiments appears to dimish the favorable impact of home bias on cost of borrowing particularly for EMs. In addition, for AMs and EMs, higher home bias is associated with higher debt levels, and less responsive fiscal policy. The findings suggest that home bias indeed matters for debt sustainability: Home bias may provide fiscal breathing space, but delays in fiscal consolidation may actually delay problems until debt reaches dangerously high levels.

Author : Tamon Asonuma,Said Bakhache,Heiko Hesse
Publisher : Unknown
Page : 128 pages
File Size : 44,8 Mb
Release : 2015
Category : Banks and banking
ISBN : 1498314619

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Is Banks' Home Bias Good Or Bad for Public Debt Sustainability? by Tamon Asonuma,Said Bakhache,Heiko Hesse Pdf

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 88 pages
File Size : 46,5 Mb
Release : 2014-12-22
Category : Business & Economics
ISBN : 9781498342438

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From Banking to Sovereign Stress - Implications For Public Debt by International Monetary Fund Pdf

This paper explores how banking sector developments and characteristics influence the propagation of risks from the banking sector to sovereign debt, including how they affect the extent of fiscal costs of banking crises when those occur. It then proposes practices and policies for the fiscal authorities to help manage the risks and enhance crisis preparedness.

Author : Mr.Giovanni Dell'Ariccia,Caio Ferreira,Nigel Jenkinson,Mr.Luc Laeven,Alberto Martin,Ms.Camelia Minoiu,Alex Popov
Publisher : International Monetary Fund
Page : 54 pages
File Size : 45,9 Mb
Release : 2018-09-07
Category : Business & Economics
ISBN : 9781484359624

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Managing the Sovereign-Bank Nexus by Mr.Giovanni Dell'Ariccia,Caio Ferreira,Nigel Jenkinson,Mr.Luc Laeven,Alberto Martin,Ms.Camelia Minoiu,Alex Popov Pdf

This paper reviews empirical and theoretical work on the links between banks and their governments (the bank-sovereign nexus). How significant is this nexus? What do we know about it? To what extent is it a source of concern? What is the role of policy intervention? The paper concludes with a review of recent policy proposals.

Author : Mr. Heiko Hesse,Mr. Ken Miyajima
Publisher : International Monetary Fund
Page : 21 pages
File Size : 46,7 Mb
Release : 2022-03-04
Category : Business & Economics
ISBN : 9798400204418

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South Africa: The Financial Sector-Sovereign Nexus by Mr. Heiko Hesse,Mr. Ken Miyajima Pdf

Globally, financial institutions have increased their holdings of domestic sovereign debt, tightening the linkage between the health of the financial system and the level of sovereign debt, or the “financial sector-sovereign nexus,” during the ongoing COVID-19 pandemic. In South Africa, the nexus is still relatively moderate, albeit rising, and the increased focus of the Prudential Authority on the associated risks provide reassurance. Options to mitigate such risks through the use of regulatory measures can be explored. However, absent the necessary fiscal consolidation and structural reforms, risks from the nexus to both the financial system and the sovereign will increase.

Author : International Monetary,International Monetary Fund. African Dept.
Publisher : International Monetary Fund
Page : 42 pages
File Size : 44,6 Mb
Release : 2022-02-11
Category : Business & Economics
ISBN : 9798400201318

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South Africa: Selected Issues by International Monetary,International Monetary Fund. African Dept. Pdf

Selected Issues

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 60 pages
File Size : 46,7 Mb
Release : 2015-09-11
Category : Business & Economics
ISBN : 9781498344043

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Public Debt Vulnerabilities in Low-Income Countries - The Evolving Landscape by International Monetary Fund Pdf

This is the first joint IMF/World Bank report on public debt vulnerabilities in low income countries (LICs). It examines debt-related developments and their underlying causes since the onset of the global financial crisis. The findings will inform the upcoming review of the IMF/WB debt sustainability framework for LICs. Over this period, improved macroeconomic performance in LICs, combined with HIPC/MDRI debt relief and high demand for commodities, contributed to improved LIC creditworthiness. At the same time, new borrowing opportunities emerged as a result of the accommodative liquidity conditions in international capital markets, the deepening of domestic financial markets for some LICs, and the growing lending activities of non-Paris Club countries. These new financing possibilities helped mitigate the decline in Paris Club lending to LICs and have been associated with a shift toward greater reliance on non-concessional credit. The changing financing landscape has been most significant for frontier LICs.

Author : Ms.Camila Henao Arbelaez,Nelson Sobrinho
Publisher : International Monetary Fund
Page : 41 pages
File Size : 43,7 Mb
Release : 2017-07-25
Category : Business & Economics
ISBN : 9781484311059

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Government Financial Assets and Debt Sustainability by Ms.Camila Henao Arbelaez,Nelson Sobrinho Pdf

Do government financial assets help improve public debt sustainability? To answer this question, we assemble a comprehensive dataset on government assets using multiple sources and covering 110 advanced and emerging market economies since the late 1980s. We then use this rich database to estimate the impact of assets on two key dimensions of debt sustainability: borrowing costs and the probability of debt distress. Government financial assets significantly reduce sovereign spreads and the probability of debt crises in emerging economies but not in advanced economies, and the effect varies with asset characteristics, notably liquidity. Government finacial assets also help discriminate countries across the distribution of sovereign spreads, thus signaling information about emerging economies’ creditworthiness.

Author : International Monetary Fund. Asia and Pacific Dept
Publisher : International Monetary Fund
Page : 86 pages
File Size : 49,9 Mb
Release : 2016-08-02
Category : Business & Economics
ISBN : 9781475522525

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Japan by International Monetary Fund. Asia and Pacific Dept Pdf

This Selected Issues paper discusses the findings of the IMF staff research focusing on labor market dynamics, economic growth, the financial sector, private investment, and monetary policy in Japan. Japan’s labor market has fared relatively well considering the occasional substantial output losses, with unemployment remaining low. Although Japan’s employment responsiveness to the cyclical position has been relatively low, it has been rising over time reflecting the higher share of the nonregular workforce. The lower employment response to output compared with other countries during the Great Recession reflects the quick implementation of an employment subsidy program, a more flexible wage system, and strong employment protection.

Author : World Bank
Publisher : World Bank Publications
Page : 178 pages
File Size : 51,8 Mb
Release : 2017-11-07
Category : Business & Economics
ISBN : 9781464811968

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Global Financial Development Report 2017/2018 by World Bank Pdf

Successful international integration has underpinned most experiences of rapid growth, shared prosperity, and reduced poverty. Perhaps no sector of the economy better illustrates the potential benefits--but also the perils--of deeper integration than banking. International banking may contribute to faster growth in two important ways: first, by making available much needed capital, expertise, and new technologies; and second, by enabling risk-sharing and diversification. But international banking is not without risks. The global financial crisis vividly demonstrated how international banks can transmit shocks across the globe. The Global Financial Development Report 2017/2018 brings to bear new evidence on the debate on the benefits and costs of international banks, particularly for developing countries. It provides evidence-based policy guidance on a range of issues that developing countries face. Countries that are open to international banking can benefit from global flows of funds, knowledge, and opportunity, but the regulatory challenges are complex and, at times, daunting. Global Financial Development Report 2017/2018 is the fourth in a World Bank series. The report also tracks financial systems in more than 200 economies before and during the global financial crisis on an accompanying website (www.worldbank.org/financialdevelopment). **Note: This World Bank report, Global Financial Development Report 2017/2018: Bankers without Borders, is not associated with the Grameen Foundation’s Bankers without Borders program, which engages volunteer consultants to donate their expertise to serve social enterprises and nonprofits in poor countries. For more information, visit: https://www.bankerswithoutborders.com.

Author : INTERNATIONAL MONETARY FUND.,International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 104 pages
File Size : 51,9 Mb
Release : 2022-04-19
Category : Business & Economics
ISBN : 9798400205293

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Global Financial Stability Report, April 2022 by INTERNATIONAL MONETARY FUND.,International Monetary Fund. Monetary and Capital Markets Department Pdf

Chapter 1 looks at the implications of the war in Ukraine on the financial system. Commodity prices pose challenging trade-offs for central banks. Many emerging and frontier markets are facing especially difficult conditions. In China, financial vulnerabilities remain elevated amid ongoing stress in the property sector and new COVID-19 outbreaks. Central banks should act decisively to prevent inflation from becoming entrenched without jeopardizing the recovery. Policymakers will need to confront the structural issues brought to the fore by the war, including the trade-off between energy security and climate transition. Chapter 2 discusses the sovereign-bank nexus in emerging markets. Bank holdings of domestic sovereign bonds have surged in emerging markets during the pandemic. With public debt at historically high levels and the sovereign credit outlook deteriorating, there is a risk of a negative feedback loop that could threaten macro-financial stability. Chapter 3 examines the challenges to financial stability posed by the rapid rise of risky business segments in fintech. Policies that target both fintech firms and incumbent banks proportionately are needed.

Author : Mr.Serkan Arslanalp,Yin Liao
Publisher : International Monetary Fund
Page : 30 pages
File Size : 44,9 Mb
Release : 2015-12-09
Category : Business & Economics
ISBN : 9781513568560

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Contingent Liabilities from Banks by Mr.Serkan Arslanalp,Yin Liao Pdf

In this paper, we develop a methodology to assess potential losses to the government that could arise from bank failures. The approach is intended to be simple, parsimonious, and used in real time. It generates an index that we call the banking sector contingent liability index (BCLI), based on the banking sector’s size, concentration, diversification, leverage, and riskiness of assets. The index is illustrated for 32 advanced and emerging market economies from 2006 to 2013, as well as a group of banks including global systemically important banks (G-SIBs).

Author : Amr Hosny
Publisher : International Monetary Fund
Page : 21 pages
File Size : 43,8 Mb
Release : 2020-05-22
Category : Business & Economics
ISBN : 9781513545370

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Non-Resident Holdings of Domestic Debt in Nigeria: Internal or External Driven? by Amr Hosny Pdf

Foreign holdings of domestic debt instruments in Nigeria have been increasing. Using data over 2007M1-2019M1, we show that, on average, global factors (global interest rates, oil prices) seem to carry more weight than domestic factors (treasury bills rate and domestic risk) in foreign portfolio invetsors’ decisions in Nigeria. Specifically, we show that foreign participation is, in the long run, positively correlated with oil prices and profitable rates of return on local-currency instruments, but negatively correlated with exchange rate depreciation pressures. In the short run, oil prices, opportunity cost of funds and perception of Nigeria-specific risks also play a role. These results highlight the volatile short-term nature of such flows and call for a package of policy reforms to attract longer term direct investments.

Author : European Investment Bank
Publisher : European Investment Bank
Page : 209 pages
File Size : 55,9 Mb
Release : 2023-10-11
Category : Business & Economics
ISBN : 9789286156045

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Finance in Africa by European Investment Bank Pdf

The Finance in Africa report emphasises the challenges faced by the African banking sector — including the impact of recent shocks, such as the COVID-19 crisis and Russia's invasion of Ukraine — and the importance of gender diversity in business and banking. The report also discusses the need for international support and sustainable finance to advance economic development and climate change in Africa. It provides insights into the financial conditions, banking sector performance, and investment trends in the region. It covers the nature of climate finance flows in Africa and the degree of climate risk on bank balance sheets. With the right measures in place, Africa has the potential to overcome its challenges and unlock its true economic potential.

Author : International Monetary Fund. Research Dept.
Publisher : International Monetary Fund
Page : 15 pages
File Size : 43,9 Mb
Release : 2015-06-18
Category : Business & Economics
ISBN : 9781513503974

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IMF Research Bulletin, June 2015 by International Monetary Fund. Research Dept. Pdf

In the June 2015 issue, the Research Summaries review "Migration: An Attractive Insurance Option in African Countries" (Ahmat Jidoud) and "Investment in Emerging Markets" (Nicolas E. Magud and Sebastian Sosa). The Q&A looks at "Seven Questions on Islamic Finance” (Inutu Lukonga). The Bulletin also includes its regular listings of recent IMF Working Papers and Staff Discussion Notes, as well as information on the "IMF Economic Review." A new IMF eLibrary discussion site on energy and climate change is highlighted, along with new recommendations from IMF Publications.