Subnational Capital Markets in Developing Countries
... what has worked, what has not, and why. As decentralization continues and urbanization spreads, local authorities need to provide more services with fewer resources from the central government. Subnational borrowing, leveraging on reliable cash flows and prudent fiscal management, can be an alternat ...
... what has worked, what has not, and why. As decentralization continues and urbanization spreads, local authorities need to provide more services with fewer resources from the central government. Subnational borrowing, leveraging on reliable cash flows and prudent fiscal management, can be an alternat ...
Felonious, Erroneous, It`s All Odious: A Story of Debt Gone Wrong
... Sovereigns, like corporations, are able to increase their available funds by incurring debt or raising capital. Corporations seek equity by issuing stock.13 Sovereigns, instead, impose taxes on their constituents to fund their budgetary needs.14 In lieu of diluting their ownership structure, busines ...
... Sovereigns, like corporations, are able to increase their available funds by incurring debt or raising capital. Corporations seek equity by issuing stock.13 Sovereigns, instead, impose taxes on their constituents to fund their budgetary needs.14 In lieu of diluting their ownership structure, busines ...
When managing the debt, Governments deal with the
... In recent years, Colombian debt has increased considerably. The Gross Non Financial Public Sector Debt was under 30% of GDP in 1996 and reached 63,3% of GDP in 2001. The Central Government has been responsible for a great deal of the debt’s growth, increasing from 17% of GDP in 1996 to 56% of GDP by ...
... In recent years, Colombian debt has increased considerably. The Gross Non Financial Public Sector Debt was under 30% of GDP in 1996 and reached 63,3% of GDP in 2001. The Central Government has been responsible for a great deal of the debt’s growth, increasing from 17% of GDP in 1996 to 56% of GDP by ...
Government, Household and Corporate Debt
... According to Reinhart and Rogoff (2009), credit booms have been associated with financial instability and crisis for as long as 800 years. Notwithstanding, the debate on the sustainability of increased indebtedness in the world economy has regained importance, as trends for both public and private d ...
... According to Reinhart and Rogoff (2009), credit booms have been associated with financial instability and crisis for as long as 800 years. Notwithstanding, the debate on the sustainability of increased indebtedness in the world economy has regained importance, as trends for both public and private d ...
The ECB`s securities markets programme
... has not been compromised as yet, the risk is there and is mostly associated with two facts. First, the ECB is given a sort of political role that is in contrast with the spirit under which the SMP was activated, insofar as it is involved in the monitoring of the reform process made by programme coun ...
... has not been compromised as yet, the risk is there and is mostly associated with two facts. First, the ECB is given a sort of political role that is in contrast with the spirit under which the SMP was activated, insofar as it is involved in the monitoring of the reform process made by programme coun ...
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... major creditors in that same month and ceased interest payments on its bonds in early December of 2006. The payment suspension thus occurred just prior to the finalization of its debt exchange in January of 2007, but more than three months after the start of negotiations. In addition, the governmen ...
... major creditors in that same month and ceased interest payments on its bonds in early December of 2006. The payment suspension thus occurred just prior to the finalization of its debt exchange in January of 2007, but more than three months after the start of negotiations. In addition, the governmen ...
Debt Maturity and the Dynamics of Leverage
... this option when it is at or in the money, i.e. if the value of the firms assets is already close to or less than the face value of debt. In this case the equityholders are willing to roll over maturing debt, even if the new bonds can only be issued at a low price. Hovakimian, Opler, and Titman (200 ...
... this option when it is at or in the money, i.e. if the value of the firms assets is already close to or less than the face value of debt. In this case the equityholders are willing to roll over maturing debt, even if the new bonds can only be issued at a low price. Hovakimian, Opler, and Titman (200 ...
Debt Specialization - Bocconi University
... rated if it has at least one monthly Standard & Poor’s long-term issuer rating, as recorded in Compustat (data item 280). There are 9,968 firm-year observations with ratings and 6,147 firmyear observations without; corresponding to about 60% and 40% of the observations in the ...
... rated if it has at least one monthly Standard & Poor’s long-term issuer rating, as recorded in Compustat (data item 280). There are 9,968 firm-year observations with ratings and 6,147 firmyear observations without; corresponding to about 60% and 40% of the observations in the ...
Inflation, default and sovereign debt
... The focus of the analysis implies that we abstract from other dimensions of sovereign debt portfolios, including investor exposure to exchange rate risk and the role that the jurisdiction of the market of issuance plays. In the data, we cannot distinguish between bonds that can be inated and those ...
... The focus of the analysis implies that we abstract from other dimensions of sovereign debt portfolios, including investor exposure to exchange rate risk and the role that the jurisdiction of the market of issuance plays. In the data, we cannot distinguish between bonds that can be inated and those ...
Default, rescheduling and inflation : debt crisis in Spain
... The inflationary tax acted when inflation rate exceeded 5% for a time. This only happened in the twentieth century (graph 3). First, during the First World War the inflation rate almost touched 15%, when the monetary supply yearly rate of growth reached 21 %. Secondly, between the Civil War and 199 ...
... The inflationary tax acted when inflation rate exceeded 5% for a time. This only happened in the twentieth century (graph 3). First, during the First World War the inflation rate almost touched 15%, when the monetary supply yearly rate of growth reached 21 %. Secondly, between the Civil War and 199 ...
Fiscal and Financial Crises*
... sheet. Once this precedent was set, a costly bailout now had the potential to create significant fiscal imbalance and even lead to a default. Moreover, guarantees could lead to moral hazard (i.e., protected banks would increase their balance sheets and take on more risk knowing that they would be ba ...
... sheet. Once this precedent was set, a costly bailout now had the potential to create significant fiscal imbalance and even lead to a default. Moreover, guarantees could lead to moral hazard (i.e., protected banks would increase their balance sheets and take on more risk knowing that they would be ba ...
Sovereign Risk, Currency Risk, and Corporate Balance Sheets.
... domestic LC sovereign debt markets, for example, Burger and Warnock (2007), Burger et al. (2012), Burger et al. (2014), and Arslanalp and Tsuda (2014). We combine data on foreign participation in domestic sovereign debt markets with data on international debt securities and cross-border loans and de ...
... domestic LC sovereign debt markets, for example, Burger and Warnock (2007), Burger et al. (2012), Burger et al. (2014), and Arslanalp and Tsuda (2014). We combine data on foreign participation in domestic sovereign debt markets with data on international debt securities and cross-border loans and de ...
13 Fiscal Monitor Fiscal Adjustment in an Uncertain World
... the IMF staff regarding macroeconomic assumptions. The medium-term fiscal projections incorporate policy measures that are judged by the IMF staff as likely to be implemented. For countries supported by an IMF arrangement, the medium-term projections are those under the arrangement. In cases in whic ...
... the IMF staff regarding macroeconomic assumptions. The medium-term fiscal projections incorporate policy measures that are judged by the IMF staff as likely to be implemented. For countries supported by an IMF arrangement, the medium-term projections are those under the arrangement. In cases in whic ...
Voluntary Sovereign Debt Exchanges
... this occurs because lower debt levels reduce future default risk and thus increase the market value of the bond holders’ debt portfolio. Figure 1 shows the market value of debt as a function of the debt stock. If the state of the economy is represented by a point like A, a marginal decline of the de ...
... this occurs because lower debt levels reduce future default risk and thus increase the market value of the bond holders’ debt portfolio. Figure 1 shows the market value of debt as a function of the debt stock. If the state of the economy is represented by a point like A, a marginal decline of the de ...
Sovereign Debt Restructurings: Delays in Renegotiations and Risk
... of sovereign defaults are of a systemic nature, different from those with an idiosyncratic nature. ...
... of sovereign defaults are of a systemic nature, different from those with an idiosyncratic nature. ...
Responding to Shocks and Maintaining Stability in the West
... Union (WAEMU)? How has synchronization evolved over time? Looking at shocks affecting the WAEMU, this chapter explores whether there has been “shock convergence” (i.e., whether shocks have become less asymmetric over time). In a second part, the chapter explores the effectiveness of monetary policy ...
... Union (WAEMU)? How has synchronization evolved over time? Looking at shocks affecting the WAEMU, this chapter explores whether there has been “shock convergence” (i.e., whether shocks have become less asymmetric over time). In a second part, the chapter explores the effectiveness of monetary policy ...
How to do a Debt Sustainability Analysis for Low
... interest rate. The NPV of a loan then summarizes the amount a country would have to invest risk free today to cover its future debt-service obligations. Putting this notion into practice has led to the use of currency specific commercial interest rates (CIRRs). CIRRs correspond to secondary market y ...
... interest rate. The NPV of a loan then summarizes the amount a country would have to invest risk free today to cover its future debt-service obligations. Putting this notion into practice has led to the use of currency specific commercial interest rates (CIRRs). CIRRs correspond to secondary market y ...
sovereign debt, domestic banks and the provision of public liquidity
... to raise funds and prevents the flow of resources to productive investments. A second and novel effect is related to the liquidity value of public debt. Banks that do not have good investment opportunities invest in public debt to transfer their wealth across time. After a default the domestic suppl ...
... to raise funds and prevents the flow of resources to productive investments. A second and novel effect is related to the liquidity value of public debt. Banks that do not have good investment opportunities invest in public debt to transfer their wealth across time. After a default the domestic suppl ...
Funding Strategies of Sovereign Debt Management: A Risk
... In the context of sovereign liability management, market liquidity risk identifies the problems of selling significant quantities of a security in a quick, anonymous way with a rather small impact on the price. The size of the debt market and the composition of the investor base are crucial elements ...
... In the context of sovereign liability management, market liquidity risk identifies the problems of selling significant quantities of a security in a quick, anonymous way with a rather small impact on the price. The size of the debt market and the composition of the investor base are crucial elements ...
2017-2018 Budget - Generations Fund
... The Act to reduce the debt and establish the Generations Fund. The Act to reduce the debt and establish the Generations Fund (CQLR, chapter R2.2.0.1) was passed on June 15, 2006. This Act set debt reduction targets and established the Generations Fund, a fund dedicated exclusively to repaying the g ...
... The Act to reduce the debt and establish the Generations Fund. The Act to reduce the debt and establish the Generations Fund (CQLR, chapter R2.2.0.1) was passed on June 15, 2006. This Act set debt reduction targets and established the Generations Fund, a fund dedicated exclusively to repaying the g ...
Does austerity pay off?
... LOEWE. Müller also thanks the German Science Foundation (DFG) for financial support under the Priority Program 1578. The usual disclaimer applies. ...
... LOEWE. Müller also thanks the German Science Foundation (DFG) for financial support under the Priority Program 1578. The usual disclaimer applies. ...
Violating the law of one price: the role of non
... loans of EUR 489 billion in the first allotment (21 December 2011) and more than EUR 500 billion in the second allotment (29 February 2012). We document that almost 50% of this liquidity is drawn by strongly-constrained banks who pledged almost 15% of their collateral in Italian sovereign bonds. A s ...
... loans of EUR 489 billion in the first allotment (21 December 2011) and more than EUR 500 billion in the second allotment (29 February 2012). We document that almost 50% of this liquidity is drawn by strongly-constrained banks who pledged almost 15% of their collateral in Italian sovereign bonds. A s ...
The Role of the IMF in Debt Restructurings: L I A , Moral Hazard and
... has often been the experience in developing countries. Moreover, the IMF has shown a systematic tendency to be overoptimistic in its debt sustainability assessments. If sustainability is not reasonably assured, there is a risk that market-friendly restructurings may not facilitate the country’s acce ...
... has often been the experience in developing countries. Moreover, the IMF has shown a systematic tendency to be overoptimistic in its debt sustainability assessments. If sustainability is not reasonably assured, there is a risk that market-friendly restructurings may not facilitate the country’s acce ...
Medium Term Debt Strategy
... and development of current practices going forward. This document is the first MTDS produced by the Ministry of Finance and National Planning (MoFNP), which provides an overall guidance for the best management of GoT’s debt in the medium term. The GoT’s debt management objective is to maintain sover ...
... and development of current practices going forward. This document is the first MTDS produced by the Ministry of Finance and National Planning (MoFNP), which provides an overall guidance for the best management of GoT’s debt in the medium term. The GoT’s debt management objective is to maintain sover ...
NBER WORKING PAPER SERIES DEBT MATURITY: IS LONG-TERM DEBT OPTIMAL? Laura Alfaro
... Brazil, Argentina—governments borrowed large amounts of short-maturity liabilities. Each of these countries subsequently had to roll over large amounts of short-term debt to meet its payment obligations.1 Scholars have argued that short-term liabilities render an economy particularly vulnerable as t ...
... Brazil, Argentina—governments borrowed large amounts of short-maturity liabilities. Each of these countries subsequently had to roll over large amounts of short-term debt to meet its payment obligations.1 Scholars have argued that short-term liabilities render an economy particularly vulnerable as t ...
European debt crisis
The European debt crisis (often also referred to as the Eurozone crisis or the European sovereign debt crisis) is a multi-year debt crisis that has been taking place in the European Union since the end of 2009. Several eurozone member states (Greece, Portugal, Ireland, Spain and Cyprus) were unable to repay or refinance their government debt or to bail out over-indebted banks under their national supervision without the assistance of third parties like other Eurozone countries, the European Central Bank (ECB), or the International Monetary Fund (IMF).The detailed causes of the debt crises varied. In several countries, private debts arising from a property bubble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing economies post-bubble. The structure of the eurozone as a currency union (i.e., one currency) without fiscal union (e.g., different tax and public pension rules) contributed to the crisis and limited the ability of European leaders to respond. European banks own a significant amount of sovereign debt, such that concerns regarding the solvency of banking systems or sovereigns are negatively reinforcing.As concerns intensified in early 2010 and thereafter, leading European nations implemented a series of financial support measures such as the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM). The ECB also contributed to solve the crisis by lowering interest rates and providing cheap loans of more than one trillion euro in order to maintain money flows between European banks. On 6 September 2012, the ECB calmed financial markets by announcing free unlimited support for all eurozone countries involved in a sovereign state bailout/precautionary programme from EFSF/ESM, through some yield lowering Outright Monetary Transactions (OMT).Return to economic growth and improved structural deficits enabled Ireland and Portugal to exit their bailout programmes in July 2014. Greece and Cyprus both managed to partly regain market access in 2014. Their bailout programme is scheduled to end in March 2016. Spain never officially received a bailout programme. It's rescue package from the ESM was earmarked for a bank recapitalization fund and did not include financial support for the government itself.The crisis had significant adverse economic effects and labour market effects, with unemployment rates in Greece and Spain reaching 27%, and was blamed for subdued economic growth, not only for the entire eurozone, but for the entire European Union. As such, it can be argued to have had a major political impact on the ruling governments in 9 out of 19 eurozone countries, contributing to power shifts in Greece, Ireland, France, Italy, Portugal, Spain, Slovenia, Slovakia, and the Netherlands.