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Author: Thomas Laryea
Publisher: International Monetary Fund
ISBN: 1462376770
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
This paper examines the estimated compliance with the macroeconomic convergence targets for 2008, based on estimates contained in the IMF’s Regional Economic Outlook: Sub-Saharan Africa (the REO). SADC’s regional economic integration agenda includes a macroeconomic convergence program, intended to achieve and maintain macroeconomic stability in the region, thereby contributing to faster economic growth and laying the basis for eventual monetary union. Targets for key macroeconomic variables have been set out for 2008, 2012, and 2018. Most SADC member states have recorded solid macroeconomic performance in recent years, in general coming close to, and in many cases surpassing, the convergence targets specified for 2008. A notable exception in this regard is Zimbabwe, which was in the grip of hyperinflation. The macroeconomic targets for 2012 are ambitious and, in some cases, warrant further evaluation, given that achieving the targets may be neither necessary nor sufficient to achieve good macroeconomic results.
Author: Thomas Laryea
Publisher: International Monetary Fund
ISBN: 1462376770
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
This paper examines the estimated compliance with the macroeconomic convergence targets for 2008, based on estimates contained in the IMF’s Regional Economic Outlook: Sub-Saharan Africa (the REO). SADC’s regional economic integration agenda includes a macroeconomic convergence program, intended to achieve and maintain macroeconomic stability in the region, thereby contributing to faster economic growth and laying the basis for eventual monetary union. Targets for key macroeconomic variables have been set out for 2008, 2012, and 2018. Most SADC member states have recorded solid macroeconomic performance in recent years, in general coming close to, and in many cases surpassing, the convergence targets specified for 2008. A notable exception in this regard is Zimbabwe, which was in the grip of hyperinflation. The macroeconomic targets for 2012 are ambitious and, in some cases, warrant further evaluation, given that achieving the targets may be neither necessary nor sufficient to achieve good macroeconomic results.
Author: Mr.Udaibir S. Das
Publisher: International Monetary Fund
ISBN: 1475505531
Category : Business & Economics
Languages : en
Pages : 128
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Book Description
This paper provides a comprehensive survey of pertinent issues on sovereign debt restructurings, based on a newly constructed database. This is the first complete dataset of sovereign restructuring cases, covering the six decades from 1950–2010; it includes 186 debt exchanges with foreign banks and bondholders, and 447 bilateral debt agreements with the Paris Club. We present new stylized facts on the outcome and process of debt restructurings, including on the size of haircuts, creditor participation, and legal aspects. In addition, the paper summarizes the relevant empirical literature, analyzes recent restructuring episodes, and discusses ongoing debates on crisis resolution mechanisms, credit default swaps, and the role of collective action clauses.
Author: Mr.Jochen R. Andritzky
Publisher: International Monetary Fund
ISBN: 1498322344
Category : Business & Economics
Languages : en
Pages : 37
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Book Description
In housing crises, high mortgage debt can feed a vicious circle of falling housing prices and declining consumption and incomes, leading to higher mortgage defaults and deeper recessions. In such situations, resolution policies may need to be adapted to help contain negative feedback loops while minimizing overall loan losses and moral hazard. Drawing on recent experiences from Iceland, Ireland, Spain, and the United States, this paper discusses how economic trade-offs affecting mortgage resolution differ in crises. Depending on country circumstances, the economic benefits of temporary forbearance and loan modifications for struggling households could outweigh their costs.
Author: Richard Marney
Publisher: Springer Nature
ISBN: 3030813061
Category : Business & Economics
Languages : en
Pages : 422
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Book Description
Corporate debt restructurings in the emerging markets have always presented special challenges. Today, as the global economy emerges from the COVID-19 pandemic and businesses look to pick up the pieces, this is even more true. For many, the financial hangover of the lockdowns and market disruptions linger and threaten their independence, even their survival. This peril is more acute in the emerging and frontier markets. Weaker economic fundamentals and institutional resiliency often intensify the challenge to return to pre-COVID-19 operating levels and financial sustainability. In this context, borrowers invariably must address the imbalance of substantial existing debt with the “new reality” of their business operations and revenues. This book, using case studies, presents a full, detailed narrative of a fictitious troubled bank in an emerging market, with characters, dialogues, and negotiations. It also includes a series of discussion questions with suggested answers, to draw out key issues from the case. In doing so, this initial narrative offers a substantive analysis of the five main phases and principles of a restructuring: (1) pre-restructuring, (2) the decision to restructure, (3) the case set-up, (4) structuring and negotiation, and lastly (5) implementation. In each chapter, the book outlines the main elements of the phases and shows how the elements are applied in practice. The book also presents separate chapters on exogenous shocks (with a focus on the COVID-19 pandemic as an example of such shocks), macroeconomics, and legal issues present in cross-border restructurings. It will be of interest to the international professional financial and legal community, primarily junior-to mid-level financiers, business people, and lawyers.
Author: Lorenzo Forni
Publisher: International Monetary Fund
ISBN: 1475526520
Category : Business & Economics
Languages : en
Pages : 42
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Book Description
This paper studies the effect of sovereign debt restructurings with external private creditors on growth during the period 1970-2010. We find that there are bad and good (or not so bad) debt restructurings for growth. While growth generally declines in the aftermath of a sovereign debt restructuring, agreements that allow countries to exit a default spell (final restructurings) are associated with improving growth. The impact can be significant. In general, three years after restructuring, growth is about 5 percent lower compared to countries that did not face restructuring over the same period. The exception is for final restructurings, which result in positive growth in the years immediately after the restructuring. Final restructurings tend to be better for growth because they reduce countries’ debt, with the strongest effect for countries that exit restructurings with relatively low debt levels.
Author: Mr.Stijn Claessens
Publisher: International Monetary Fund
ISBN: 1475543409
Category : Business & Economics
Languages : en
Pages : 670
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Book Description
The lingering effects of the economic crisis are still visible—this shows a clear need to improve our understanding of financial crises. This book surveys a wide range of crises, including banking, balance of payments, and sovereign debt crises. It begins with an overview of the various types of crises and introduces a comprehensive database of crises. Broad lessons on crisis prevention and management, as well as the short-term economic effects of crises, recessions, and recoveries, are discussed.
Author: Wojciech Maliszewski
Publisher: International Monetary Fund
ISBN: 1475545282
Category : Business & Economics
Languages : en
Pages : 43
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Book Description
Corporate credit growth in China has been excessive in recent years. This credit boom is related to the large increase in investment after the Global Financial Crisis. Investment efficiency has fallen and the financial performance of corporates has deteriorated steadily, affecting asset quality in financial institutions. The corporate debt problem should be addressed urgently with a comprehensive strategy. Key elements should include identifying companies in financial difficulties, proactively recognizing losses in the financial system, burden sharing, corporate restructuring and governance reform, hardening budget constraints, and facilitating market entry. A proactive strategy would trade off short-term economic pain for larger longer-term gain.
Author: Ms.Yan Liu
Publisher: International Monetary Fund
ISBN: 1475546238
Category : Business & Economics
Languages : en
Pages : 21
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Book Description
The private non-financial sector in Europe is facing increased challenges in meeting its debt servicing obligation. In response, governments are revisiting legal tools and—in some cases—institutional arrangements to deal with over-indebtedness. For households, where the problem in some countries is large but no established best practice exists, reforms have generally sought to allow debtors a fresh start while minimizing moral hazard and preserving bank solvency and credit discipline. For the corporate sector, efforts have focused on facilitating debt restruturing (including through out of court mechanisms). Direct government intervention has been rare.
Author: International Monetary Fund. Finance Dept.
Publisher: International Monetary Fund
ISBN: 149831855X
Category : Business & Economics
Languages : en
Pages : 60
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Book Description
This paper presents an Ex Post Evaluation of the 2010 Extended Fund Facility (EFF) arrangement with Ireland. The Fund approved in December 2010 an exceptional access EFF arrangement for SDR 19.466 billion (2,321.8 percent of quota) in support of Ireland’s home-grown program and as part of a broader financing package of Ireland and its European partners. The program focused on addressing the Irish banking crisis to break the adverse feedback loop between banks, the sovereign, and the real sector. It aimed to restore the banking system to health, including by establishing a smaller banking sector with high capital buffers and more stable funding sources; and to secure fiscal sustainability while limiting the near-term demand drag from fiscal consolidation. Large external financing was a key element of the crisis response. Program implementation was very strong. The program succeeded in stabilizing the banking sector and reducing its size, and fiscal developments were also broadly as anticipated. Domestic demand was, however, weaker than programmed and unemployment remained high, amid a very challenging external environment. Program success, including regaining market access at low interest rates, benefitted also from actions at the wider euro area level. The Ex Post Evaluation draws several lessons from Ireland’s experience under the EFF: ? The main lessons emerge from what worked well: Strong country ownership, setting (and meeting) realistic and tailored targets were key for success, combined with effective communication and pro-active engagement. Addressing a banking crisis requires strong and credible actions upfront. ? Some areas offer lessons for future program design: While the main pillars of the financial sector program were sound, more proactive and stronger supervisory interventions and other supportive steps could have strengthened banks’ balance sheets and bank profitability and helped resolve problem loans; bank recapitalization should be limited to those with viable medium-term business strategies; unsecured and non-guaranteed creditors of failed banks should be bailed in, provided a strategy to ring fence potential systemic risks can be put in place; macro-financial linkages require careful attention and timely steps to limit sovereignbanking sector feedback loops; fiscal policy has to be mindful of debt sustainability but also of domestic demand conditions, and it needs a clear anchor. ? There are also lessons related to Fund policies: Ireland’s EFF underscores the importance of addressing shortcomings of the systemic exemption clause in Criterion 2 of the exceptional access criteria; and it suggests the need to explore ways to secure stronger upfront commitments from monetary union authorities, when those are critical for program success.
Author: Ms.Marina Moretti
Publisher: International Monetary Fund
ISBN: 1513512277
Category : Business & Economics
Languages : en
Pages : 88
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Book Description
This paper updates the IMF’s work on general principles, strategies, and techniques from an operational perspective in preparing for and managing systemic banking crises in light of the experiences and challenges faced during and since the global financial crisis. It summarizes IMF advice concerning these areas from staff of the IMF Monetary and Capital Markets Department (MCM), drawing on Executive Board Papers, IMF staff publications, and country documents (including program documents and technical assistance reports). Unless stated otherwise, the guidance is generally applicable across the IMF membership.
