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Author: Barry Eichengreen
Publisher: University of Chicago Press
ISBN: 0226194574
Category : Business & Economics
Languages : en
Pages : 305
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Book Description
Recent crises in emerging markets have been heavily driven by balance-sheet or net-worth effects. Episodes in countries as far-flung as Indonesia and Argentina have shown that exchange rate adjustments that would normally help to restore balance can be destabilizing, even catastrophic, for countries whose debts are denominated in foreign currencies. Many economists instinctually assume that developing countries allow their foreign debts to be denominated in dollars, yen, or euros because they simply don't know better. Presenting evidence that even emerging markets with strong policies and institutions experience this problem, Other People's Money recognizes that the situation must be attributed to more than ignorance. Instead, the contributors suggest that the problem is linked to the operation of international financial markets, which prevent countries from borrowing in their own currencies. A comprehensive analysis of the sources of this problem and its consequences, Other People's Money takes the study one step further, proposing a solution that would involve having the World Bank and regional development banks themselves borrow and lend in emerging market currencies.
Author: Barry Eichengreen
Publisher: University of Chicago Press
ISBN: 0226194574
Category : Business & Economics
Languages : en
Pages : 305
Get Book
Book Description
Recent crises in emerging markets have been heavily driven by balance-sheet or net-worth effects. Episodes in countries as far-flung as Indonesia and Argentina have shown that exchange rate adjustments that would normally help to restore balance can be destabilizing, even catastrophic, for countries whose debts are denominated in foreign currencies. Many economists instinctually assume that developing countries allow their foreign debts to be denominated in dollars, yen, or euros because they simply don't know better. Presenting evidence that even emerging markets with strong policies and institutions experience this problem, Other People's Money recognizes that the situation must be attributed to more than ignorance. Instead, the contributors suggest that the problem is linked to the operation of international financial markets, which prevent countries from borrowing in their own currencies. A comprehensive analysis of the sources of this problem and its consequences, Other People's Money takes the study one step further, proposing a solution that would involve having the World Bank and regional development banks themselves borrow and lend in emerging market currencies.
Author: Sergio L. Schmukler
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
September 2001 Changes in sovereign ratings affect country risk and stock returns. And these changes are transmitted across countries, with neighbor-country effects being more significant. Financial market instability has received attention from both academic and policy circles. Rating agencies have been under particular scrutiny lately as promoters of financial excesses, upgrading countries in good times and downgrading them in bad. Using a panel of emerging economies, Kaminsky and Schmukler examine whether sovereign ratings affect financial markets. The authors find that changes in sovereign ratings affect country risk and stock returns. They also find that these changes are transmitted across countries, with neighbor-country effects being more significant. Rating upgrades tend to follow market rallies; downgrades tend to follow market downturns. Countries with more vulnerable economies, as measured by low ratings, are more sensitive to changes in U.S. interest rates. This paper--a product of Macroeconomics and Growth, Development Research Group--is part of a larger effort in the group to understand how financial markets work in developing countries. The authors may be contacted at
[email protected] or
[email protected].
Author: Graciela Laura Kaminsky
Publisher: World Bank Publications
ISBN:
Category : Contagio financiero
Languages : en
Pages : 35
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Book Description
Changes in sovereign ratings affect country risk and stock returns. And these changes are transmitted across countries, with neighbor-country effects being more significant.
Author: Graciela Kaminsky
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
Changes in sovereign ratings affect country risk and stock returns. And these changes are transmitted across countries, with neighbor-country effects being more significant.Financial market instability has received attention from both academic and policy circles. Rating agencies have been under particular scrutiny lately as promoters of financial excesses, upgrading countries in good times and downgrading them in bad. Using a panel of emerging economies, Kaminsky and Schmukler examine whether sovereign ratings affect financial markets.The authors find that changes in sovereign ratings affect country risk and stock returns. They also find that these changes are transmitted across countries, with neighbor-country effects being more significant. Rating upgrades tend to follow market rallies; downgrades tend to follow market downturns. Countries with more vulnerable economies, as measured by low ratings, are more sensitive to changes in U.S. interest rates.This paper - a product of Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to understand how financial markets work in developing countries. The authors may be contacted at
[email protected] or
[email protected].
Author: Masahiro Kawai
Publisher: Brookings Institution Press
ISBN: 0815704895
Category : Business & Economics
Languages : en
Pages : 441
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Book Description
"In the wake of the global financial crisis that began in 2008, offers a systematic overview of recent developments in regulatory frameworks in advanced and emerging-market countries, outlining challenges to improving regulation, markets, and access in developing economies"--Provided by publisher.
Author: Ms.Ratna Sahay
Publisher: International Monetary Fund
ISBN: 1498312616
Category : Business & Economics
Languages : en
Pages : 41
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Book Description
The global financial crisis experience shone a spotlight on the dangers of financial systems that have grown too big too fast. This note reexamines financial deepening, focusing on what emerging markets can learn from the advanced economy experience. It finds that gains for growth and stability from financial deepening remain large for most emerging markets, but there are limits on size and speed. When financial deepening outpaces the strength of the supervisory framework, it leads to excessive risk taking and instability. Encouragingly, the set of regulatory reforms that promote financial depth is essentially the same as those that contribute to greater stability. Better regulation—not necessarily more regulation—thus leads to greater possibilities both for development and stability.
Author: G. Andrew Karolyi
Publisher: Financial Management Associati
ISBN: 0199336628
Category : Business & Economics
Languages : en
Pages : 313
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Book Description
In Cracking the Emerging Markets Enigma, emerging markets expert Andrew Karolyi outlines a practical strategy for evaluating the opportunities and-more importantly-the risks of investing in emerging markets. Karolyi's proposed system evaluates multiple dimensions of the potential risks faced by prospective investors. These categories of risk reflect the uneven quality or fragility of the various institutions designed to assure integrity in capital markets-political stability, corporate opacity, limits placed on foreign investors, and more. By distilling these analyses into a numerical scoring system, Karolyi has devised a way to assess with ease emerging markets by different dimensions of risk and across all dimensions together.
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN: 1498324029
Category : Business & Economics
Languages : en
Pages : 109
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Book Description
The October 2019 Global Financial Stability Report (GFSR) identifies the current key vulnerabilities in the global financial system as the rise in corporate debt burdens, increasing holdings of riskier and more illiquid assets by institutional investors, and growing reliance on external borrowing by emerging and frontier market economies. The report proposes that policymakers mitigate these risks through stricter supervisory and macroprudential oversight of firms, strengthened oversight and disclosure for institutional investors, and the implementation of prudent sovereign debt management practices and frameworks for emerging and frontier market economies.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1513569678
Category : Business & Economics
Languages : en
Pages : 92
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Book Description
Extraordinary policy measures have eased financial conditions and supported the economy, helping to contain financial stability risks. Chapter 1 warns that there is a pressing need to act to avoid a legacy of vulnerabilities while avoiding a broad tightening of financial conditions. Actions taken during the pandemic may have unintended consequences such as stretched valuations and rising financial vulnerabilities. The recovery is also expected to be asynchronous and divergent between advanced and emerging market economies. Given large external financing needs, several emerging markets face challenges, especially if a persistent rise in US rates brings about a repricing of risk and tighter financial conditions. The corporate sector in many countries is emerging from the pandemic overindebted, with notable differences depending on firm size and sector. Concerns about the credit quality of hard-hit borrowers and profitability are likely to weigh on the risk appetite of banks. Chapter 2 studies leverage in the nonfinancial private sector before and during the COVID-19 crisis, pointing out that policymakers face a trade-off between boosting growth in the short term by facilitating an easing of financial conditions and containing future downside risks. This trade-off may be amplified by the existing high and rapidly building leverage, increasing downside risks to future growth. The appropriate timing for deployment of macroprudential tools should be country-specific, depending on the pace of recovery, vulnerabilities, and policy tools available. Chapter 3 turns to the impact of the COVID-19 crisis on the commercial real estate sector. While there is little evidence of large price misalignments at the onset of the pandemic, signs of overvaluation have now emerged in some economies. Misalignments in commercial real estate prices, especially if they interact with other vulnerabilities, increase downside risks to future growth due to the possibility of sharp price corrections.
Author: Mr.Ricardo J. Caballero
Publisher: International Monetary Fund
ISBN: 1451855095
Category : Business & Economics
Languages : en
Pages : 54
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Book Description
The entire difference between a mild downturn and a devastating crisis is the occurrence of sharp fire sales of domestic assets and possibly foreign exchange and the ensuing collapse in the balance sheets of both the financial and nonfinancial sector. Why and how do such crises materialize? And why doesn’t the private sector take appropriate precautions to avoid the consequences of crises? In this paper we argue that the combination of weak international financial links and underdeveloped domestic financial markets offers a parsimonious account of these and related phenomena present in emerging markets.
