Fiscal Risks
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Government At Risk
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Author : Hana Polackova Brixi
language : en
Publisher: World Bank Publications
Release Date : 2002
Government At Risk written by Hana Polackova Brixi and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with Business & Economics categories.
Many governments have faced serious instability as a result of their contingent liabilities. But conventional public finance analysis and institutions fail to address such fiscal risks. This book aims to provide motivation and practical guidance to governments seeking to improve theirmanagement of fiscal risks. The book addresses some of the difficult analytical and institutional challenges that face reformers tooling up to manage government fiscal risks. It discusses the inadequacies of conventional practices as well as recent advances in dealing with fiscal risk.
Fiscal Risks Sources Disclosure And Management
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Author : International Monetary Fund. Fiscal Affairs Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2008-05-31
Fiscal Risks Sources Disclosure And Management written by International Monetary Fund. Fiscal Affairs Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008-05-31 with Business & Economics categories.
A number of member countries have expressed interest in advice regarding disclosure and management of fiscal risks (defined as the possibility of deviations of fiscal outcomes from what was expected at the time of the budget or other forecast). This paper analyzes the main sources of fiscal risks and—building on an overview of existing practices in a wide range of countries—provides practical suggestions in this area, including a possible Statement of Fiscal Risks and a set of Guidelines for Fiscal Risk Disclosure and Management.
Analyzing And Managing Fiscal Risks Best Practices
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Author : International Monetary Fund. Fiscal Affairs Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2016-04-05
Analyzing And Managing Fiscal Risks Best Practices written by International Monetary Fund. Fiscal Affairs Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-04-05 with Business & Economics categories.
Comprehensive analysis and management of fiscal risks can help ensure sound fiscal public finances and macroeconomic stability. This has been underscored by the global financial crisis and the more recent collapse in commodity prices, which starkly illustrate the vulnerability of public finances to risk. Indeed, over the past quarter century, governments experienced on average an adverse fiscal shock of 6 percent of GDP once every 12 years, with some of the largest stemming from financial crises. Countries need a more complete understanding of these potential threats to their fiscal position. Existing fiscal risk disclosure and analysis practices tend to be incomplete, fragmented, and qualitative in nature. A more comprehensive and integrated assessment of the potential shocks to government finances, in the form of a fiscal stress test, can help policymakers simulate the effects of shocks to their central forecasts and their implications for government solvency, liquidity, and financing needs. Comprehensive, reliable, and timely fiscal data covering all public entities, stocks, and flows are a necessary foundation for such analysis. Countries should also enhance their capacity to mitigate and manage fiscal risks. Fiscal risk management practices are often blunt, ad hoc, and too focused on imposing limits on the creation of exposures. Countries need to expand their toolkits for fiscal risk management and adopt the use of instruments to transfer, share, or provision for risks. In doing so, countries need to weigh the possible benefits from reducing their exposure to shocks against the financial and other costs of the policies that may be needed. Finally, countries should make greater use of probabilistic forecasting methods when setting long-run objectives and medium-term targets for fiscal policy. The paper illustrates how simple probabilistic tools can be used to map the uncertainty around medium-term trajectories for public debt. In combination with fiscal stress tests, these tools can provide valuable information regarding the probabilities that a country will stay within the debt ceilings embedded in their fiscal rules. The Fund is playing an important role in supporting improvements in fiscal risk analysis and management among its members. This includes technical assistance in constructing public sector balance sheets; developing institutions and capacity to identify specific fiscal risks and to quantify their potential impact; undertaking fiscal stress tests; and integrating risks into the design of medium-term fiscal targets.
Getting The Dog To Bark
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Author : Timothy Irwin
language : en
Publisher: International Monetary Fund
Release Date : 2015-09-28
Getting The Dog To Bark written by Timothy Irwin and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-09-28 with Business & Economics categories.
Fiscal reporting is intended to warn of fiscal crises while there is still time to prevent them. The recent crisis thus seems to reveal a failure of fiscal reporting: before the crisis, even reports on fiscal risk typically did not mention banks as a possible source of fiscal problems. One reason for silence was that the risk arose partly from implicit guarantees, and governments may have feared that disclosure would increase moral hazard. The crisis cast doubt, however, on the effectiveness of silence in mitigating risks. This paper discusses how fiscal risks from the financial sector could be discussed in reports on fiscal risk, with a view to encouraging their mitigation.
How To Assess Fiscal Risks From State Owned Enterprises
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Author : Ms. Anja Baum
language : en
Publisher: International Monetary Fund
Release Date : 2021-08-19
How To Assess Fiscal Risks From State Owned Enterprises written by Ms. Anja Baum and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-08-19 with Business & Economics categories.
The size and operation of state-owned enterprises (SOEs) can imply significant risks for governments. SOEs are present in virtually every country in the world and are major players in domestic economies and in global markets. In some countries, they number in the thousands and are owned by national or subnational governments. SOEs are among the largest corporations in some advanced economies and comprise a third or more of the largest firms in several emerging markets. Many operate with systematic losses and carry significant liabilities. If SOEs face adverse shocks and financial distress they can impact the government budget or balance sheet through numerous transmission channels. This How to Note describes a newly developed SOE risk assessment tool to help country authorities and IMF country teams. The analysis can provide inputs for annual budgets and medium-term fiscal planning. This includes providing estimates of possible transfers to and from SOEs to the budget and possible financing needs. The note outlines the main steps and elements of the template to assess fiscal risks for governments from individual SOEs. The first step is to collect financial information on SOEs and their relation to the government budget, and to provide a benchmark against other SOEs in similar sectors. A second step is to do a forward-looking analysis based on baseline forecasts and stress scenarios, to identify and analyze possible risks and their impact on government accounts.
Contingent Government Liabilities
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Author : Hana Polackova
language : en
Publisher: World Bank Publications
Release Date : 1998
Contingent Government Liabilities written by Hana Polackova and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1998 with Disclosure of information categories.
October 1998 Many governments have faced serious fiscal instabilities as a result of their growing contingent liabilities. But conventional fiscal analysis and institutions fall short in addressing contingent fiscal risks. What approaches in fiscal analysis and standards for public sector management would foster sound fiscal performance? And how can policymakers be made accountable for recognizing the long-term costs of both direct and contingent forms of government activity in their decisions? Governments are increasingly exposed to fiscal risks and uncertainties for three main reasons: * The increasing volume and volatility of international flows of private capital. * The state's transformation from financing services to guaranteeing that the private sector will achieve particular outcomes. * Moral hazards arising in markets because the government is perceived to have residual responsibility for market outcomes. Sources of fiscal risk may be direct or contingent (a liability only if a particular event occurs). Whether direct or contingent, they are either explicit (recognized as a government liability by law or by contract) or implicit (a moral obligation reflecting public expectations and pressure from interest groups). The recent Asian crisis revealed that major moral hazards exist in markets and that sizable hidden fiscal risks may arise from contingent forms of government support. Governments must understand and know how to handle contingent liabilities if they are to avoid the danger of sudden fiscal instability and realize their long-term policy objectives. They can reduce fiscal risks by incorporating contingent liabilities into their analytical, policy, and institutional public finance frameworks. Governments can address fiscal risk through three channels in particular, says Polackova: * By including contingent and implicit financial risks in their fiscal analysis and (to deter moral hazard in the market) by publicly acknowledging the limits of state responsibilities. * By reflecting the cost of contingent liabilities in policy choices, budgeting, financial planning, reporting, and auditing. * By developing institutional capacity to evaluate, regulate, control, and prevent financial risk in both the public and private sectors. Given the increasingly serious implications of contingent government liabilities for the fiscal outlook of countries, Polackova argues that it is time for the World Bank, the International Monetary Fund, and others to: * Incorporate government contingent fiscal risks in their analysis of a country's fiscal sustainability, policies, and institutions. * Require countries to disclose information regarding their exposure to contingent fiscal risks. * Help countries embrace contingent liabilities in their analytical, policy, and institutional public finance frameworks. This paper-a product of the Poverty Reduction and Economic Management Sector Unit, Europe and Central Asia Region-is part of a larger effort in the region to enhance the Bank's analytical and operational work in public finance. The author may be contacted at [email protected].
Public Private Partnerships In The New Eu Member States
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Author : Nina Budina
language : en
Publisher: World Bank Publications
Release Date : 2007-01-01
Public Private Partnerships In The New Eu Member States written by Nina Budina and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-01-01 with Business & Economics categories.
Public-private partnerships (PPPs) are popular around the world, in part because they allow governments to secure much-needed investment in public services without immediately having to raise taxes or borrow. Yet, PPPs pose a fiscal danger because a government's desire to avoid reporting immediate liabilities may blind it to future fiscal costs and risks. Although PPPs may not blemish governments' reported fiscal statements in the short term, they do create fiscal obligations. This increases fiscal vulnerability and can result in poorly-designed PPPs. The extent of the danger depends on the fiscal institutions that shape and constrain government decisions toward PPPs. Such fiscal institutions affect decisionmaking incentives. Better fiscal institutions therefore can increase the chance that PPPs will be well designed and appropriately used.
How To Manage Fiscal Risks From Subnational Governments
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Author : Sandeep Saxena
language : en
Publisher: International Monetary Fund
Release Date : 2022-09
How To Manage Fiscal Risks From Subnational Governments written by Sandeep Saxena and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-09 with categories.
Subnational governments can create sizable fiscal risks for central governments. In addition to impacting service delivery at the grassroots level, unsustainable subnational finances can be a continuous drain on central resources. The need for stronger public financial management systems and capacities to analyze and manage risks at the subnational government level cannot be overemphasized. Central governments need to develop sound institutional mechanisms to systematically monitor the health of subnational finances to be able to proactively manage associated risks. This How to Note provides a framework for central governments that seek to assess and manage fiscal risks stemming from weak subnational finances. It analyzes the sources of subnational finance vulnerabilities and argues that central governments would benefit from putting in place the following: (1) a stronger regulatory framework, (2) improved fiscal reporting, and (3) enhanced central oversight. The lessons distilled from the international experience are particularly useful for developing economies where the management of risks can be improved.
Namibia
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Author : International Monetary Fund. Fiscal Affairs Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2018-08-16
Namibia written by International Monetary Fund. Fiscal Affairs Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-08-16 with Business & Economics categories.
Following a period of strong growth, the Namibian economy is experiencing a slowdown. Despite efforts from the authorities, there is still limited fiscal space to fund through the budget the large capital programs that underpin Namibia’s long-term growth strategy. Consequently, the government is turning to public entities (PE) and public private partnerships (PPPs), which is resulting in a build-up of off-budget commitments and fiscal risks. The government is seeking to develop a framework to strengthen the management and reporting of fiscal risks. Like many countries, Namibia is exposed to a variety of fiscal risks, which should be analyzed and reported annually in a Fiscal Risk Statement (FRS). Fiscal risks are factors that may cause fiscal outcomes to deviate from expectations or forecasts. Should such risks materialize, they could undermine ongoing fiscal consolidation, public debt would continue to deviate from a sustainable path and recovery of investment grade level would be very difficult.
Managing Fiscal Risks From State Owned Enterprises
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Author : Ms.Anja Baum
language : en
Publisher: INTERNATIONAL MONETARY FUND
Release Date : 2020-09-25
Managing Fiscal Risks From State Owned Enterprises written by Ms.Anja Baum and has been published by INTERNATIONAL MONETARY FUND this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-09-25 with Business & Economics categories.
Ensuring that state-owned enterprises (SOEs) are efficient and managed prudently is important for economic and social reasons. It is also crucial to contain fiscal risks and reduce the burden on taxpayers from recurrent and large bailouts. Governments need to develop stronger capacity to monitor and mitigate the risks from SOEs. We present a risk tool to benchmark the performance of SOEs relative to their peers and assess their vulnerabilities, including through stress tests. A strategy to mitigate risks requires the right incentives for managers to perform and for government agencies to conduct effective oversight. Incorporating SOEs in overall fiscal targets would promote greater fiscal discipline and transparency.