Sovereign Gdp Linked Bonds
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Sovereign Gdp Linked Bonds
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Author : James Benford
language : en
Publisher:
Release Date : 2016
Sovereign Gdp Linked Bonds written by James Benford and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Sovereign Gdp Linked Bonds
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Author : James Benford
language : en
Publisher:
Release Date : 2018
Sovereign Gdp Linked Bonds written by James Benford and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
Gdp Linked Bonds And Sovereign Default
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Author : David G. Barr
language : en
Publisher:
Release Date : 2014
Gdp Linked Bonds And Sovereign Default written by David G. Barr and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Boosting Fiscal Space
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Author : Mr.Jonathan David Ostry
language : en
Publisher: International Monetary Fund
Release Date : 2018-03-14
Boosting Fiscal Space written by Mr.Jonathan David Ostry 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 2018-03-14 with Business & Economics categories.
Noting that the aftermath of the global financial crisis has left many advanced economies with very high sovereign debt ratios and some emerging markets with high debt, this report considers whether there are ways to expand fiscal space that do not involve countries paying down debt or promising to do so in the future, to make fiscal consolidation more growth-friendly. It explains that policymakers argue that their fiscal space is limited and that it would be difficult to take advantage of the opportunity of low interest rates to undertake fiscal expansion, and it considers a ways to raise fiscal space that does not require contractionary fiscal policy and whether there is a way to make fiscal consolidation more growth-friendly to produce larger gains in fiscal space. It argues that debt management policies may provide an answer to expanding fiscal space for a given path of primary fiscal balances by reducing the risk that a sovereign may default in bad states and generate a payoff in terms of reduced to real borrowing costs. It describes two debt management policies: issuance of GDP-linked debt and issuance of longer maturity bonds, as opposed to short-term debt. It focuses on the effect of these debt management policies on real borrowing costs and default risk for the sovereign and details the literature on GDP-linked debt and the maturity structure and how the report fills gaps in the literature; how uncertainty affects fiscal space and how debt management can play a role in increasing it, with estimates and simulations of potential gains in fiscal space flowing from debt management; and the sensitivity of the findings to underlying assumptions and policy implications.
The Premia On State Contingent Sovereign Debt Instruments
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Author : Deniz Igan
language : en
Publisher: International Monetary Fund
Release Date : 2021-12-03
The Premia On State Contingent Sovereign Debt Instruments written by Deniz Igan 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 2021-12-03 with Business & Economics categories.
State-contingent debt instruments such as GDP-linked warrants have garnered attention as a potential tool to help debt-stressed economies smooth repayments over business cycles, yet very few studies of the empirical properties of these instruments exist. This paper develops a general f ramework to estimate the time-varying risk premium of a state-contingent sovereign debt instrument. Our estimation framework applied to GDP-linked warrants issued by Argentina, Greece, and Ukraine reveals three stylized facts: (i) the risk premium in state-contingent instruments is high and persistent; (ii) the risk premium exhibits a pro-cyclical pattern; and (iii) the liquidity premium is higher and more volatile than that for plain-vanilla government bonds issued by the same sovereign. We then present a model in which investors fear ambiguity and that can account for the cyclical properties of the risk premium.
Debt Limits And The Structure Of Public Debt
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Author : Alex Pienkowski
language : en
Publisher: International Monetary Fund
Release Date : 2017-05-22
Debt Limits And The Structure Of Public Debt written by Alex Pienkowski 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 2017-05-22 with Business & Economics categories.
This paper provides a tractable framework to assess how the structure of debt instruments—specifically by currency denomination and indexation to GDP—can raise the debt limit of a sovereign. By calibrating the model to different country fundamentals, it is clear that there is no one-size-fits-all approach to optimal instrument design. For instance, low income countries may find benefit in issuing local currency debt; while in advanced economies debt tolerance can be substantially enhanced through issuing GDP-linked bonds. By looking at the marginal impact of these instruments, the paper also provides insight into the optimal portfolio compostion.
Sovereign Debt Structure For Crisis Prevention
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Author : Mr.Eduardo Borensztein
language : en
Publisher: International Monetary Fund
Release Date : 2005-01-26
Sovereign Debt Structure For Crisis Prevention written by Mr.Eduardo Borensztein 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 2005-01-26 with Business & Economics categories.
The debate on government debt in the context of possible reforms of the international financial architecture has thus far focused on crisis resolution. This paper seeks to broaden this debate. It asks how government debt could be structured to pursue other objectives, including crisis prevention, international risk-sharing, and facilitating the adjustment of fiscal variables to changes in domestic economic conditions. To that end, the paper considers recently developed analytical approaches to improving sovereign debt structure using existing instruments, and reviews a number of proposals--including the introduction of explicit seniority and GDP-linked instruments--in the sovereign context.
State Contingent Debt Instruments For Sovereigns
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Author : International Monetary Fund. Asia and Pacific Dept
language : en
Publisher: International Monetary Fund
Release Date : 2017-05-22
State Contingent Debt Instruments For Sovereigns written by International Monetary Fund. Asia and Pacific 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 2017-05-22 with Business & Economics categories.
Background. The case for sovereign state-contingent debt instruments (SCDIs) as a countercyclical and risk-sharing tool has been around for some time and remains appealing; but take-up has been limited. Earlier staff work had advocated the use of growth-indexed bonds in emerging markets and contingent financial instruments in low-income countries. In light of recent renewed interest among academics, policymakers, and market participants—staff has analyzed the conceptual and practical issues SCDIs raise with a view to accelerate the development of self-sustaining markets in these instruments. The analysis has benefited from broad consultations with both private market participants and policymakers. The economic case for SCDIs. By linking debt service to a measure of the sovereign’s capacity to pay, SCDIs can increase fiscal space, and thus allow greater policy flexibility in bad times. They can also broaden the sovereign’s investor base, open opportunities for risk diversification for investors, and enhance the resilience of the international financial system. Should SCDI issuance rise to account for a large share of public debt, it could also significantly reduce the incidence and cost of sovereign debt crises. Some potential complications require mitigation: a high novelty and liquidity premium demanded by investors in the early stage of market development; adverse selection and moral hazard risks; undesirable pricing effects on conventional debt; pro-cyclical investor demand; migration of excessive risk to the private sector; and adverse political economy incentives.
Gdp Linked Bonds
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Author : Oleg Ruban
language : en
Publisher:
Release Date : 2007
Gdp Linked Bonds written by Oleg Ruban and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
Reviving The Case For Gdp Indexed Bonds
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Author : Mr.Eduardo Borensztein
language : en
Publisher: International Monetary Fund
Release Date : 2002-09-01
Reviving The Case For Gdp Indexed Bonds written by Mr.Eduardo Borensztein 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 2002-09-01 with Business & Economics categories.
This paper seeks to revive the case for countries to self-insure against economic growth slowdowns by issuing GDP-indexed bonds. We simulate the effects of GDP-indexed bonds under different assumptions about fiscal policy reaction functions and their output effects and find that they could substantially reduce the likelihood that debt/GDP paths become explosive. The insurance premium would likely be small, because cross-country comovement of GDP growth rates is low and cross-country GDP growth risk is thus largely diversifiable for an investor holding a portfolio of GDP-indexed bonds. Potential obstacles to the emergence of a market for these bonds include the verifiability of GDP data, the trade-off between insurance and moral hazard, and the need for liquidity. The paper discusses institutional fixes and suggests an approach to attempting to start up a market.