scholarly journals A Compendium of Policy Instruments to Enhance Financial Stability and Debt Management in Emerging Market Economies

2007 ◽  
Author(s):  
Ronald U. Mendoza
Keyword(s):  
Financial Stability ◽  
Emerging Market ◽  
Policy Instruments ◽  
Debt Management ◽  
Emerging Market Economies ◽  
Market Economies

The non-financial sector debt: Global trends

2021 ◽  
Vol 27 (1) ◽  
pp. 41-62
Author(s):  
Konstantin V. KRINICHANSKII
Keyword(s):  
Emerging Market ◽  
Financial Sector ◽  
Debt Management ◽  
Emerging Market Economies ◽  
Monetary Policies ◽  
Global Trends ◽  
Market Economies ◽  
Time Period ◽  
Institutional Differences ◽  
Grouping Method

Subject. This article examines the non-financial sector debt ratio relative to the GDP of emerging and developed market economies. Objectives. The article aims to find out what institutional units show debt growth or reduction, what causes and conditions prevent debt decline or lead to its growth in different countries and sectors, and highlight the foundations of public policy in this area. Methods. For the study, I used a cross-country comparative analysis, grouping method, and graphical and trend analyses. The study covers 43 market economies, including 26 developed and 17 emerging ones. The time period is from Q4 2001 to Q4 2019. Results. The article identifies and describes the structural debt changes that have taken place since 2008, which include a reduction in private sector leverage and rising public sector debt in developed market economies, and accelerated growth in the non-financial corporations and households' debt in emerging market economies. Conclusions and Relevance. Given the different conditions of access to the capital market and the institutional differences between developed and emerging market economies, different approaches to debt management are needed. The identified trends are important to develop non-financial sector debt management policies, including both fiscal and monetary policies.

scholarly journals A note on money creation in emerging market economies

2017 ◽  
Vol 9 (1) ◽  
pp. 70-85 ◽  
Author(s):  
Alexey Ponomarenko
Keyword(s):  
Emerging Markets ◽  
Financial Stability ◽  
Foreign Currency ◽  
Emerging Market ◽  
Emerging Market Economies ◽  
Special Focus ◽  
Ratio Requirement ◽  
Content Type ◽  
Market Economies ◽  
Money Creation

Purpose This paper aims to discuss the money creation mechanisms in emerging markets with special focus on external transactions and outlines the implications for monetary policy and financial stability issues. Design/methodology/approach To make the argument, the authors analyze a historical episode of flows of funds in Korea and Russia and conduct a canonical correlation analysis for a cross-section of emerging market economies. Findings The authors show that changes in the net foreign assets of the banking system are associated with (or cause) deposits fluctuations. In emerging markets, however, the scope of such fluctuations is limited unless driven by changes in the foreign reserves of a central bank. Originality/value Some preliminary implications for financial stability implementation may be drawn from this analysis. Introducing the net stable funding ratio requirement is unlikely to have any significant destabilizing effect on credit creation in emerging markets (in this regard, it is similar to the restriction on banks’ foreign currency position, which is a common prudential measure). Instead, it is likely to trigger a balance of payment adjustment that is similar to that experienced by an economy during its transition from fixed to flexible exchange rate regime.

scholarly journals Emerging markets and the international financial architecture: a blueprint for reform

2015 ◽  
Vol 35 (2) ◽  
pp. 285-305 ◽  
Author(s):  
JAN KREGEL
Keyword(s):  
Emerging Markets ◽  
Financial Stability ◽  
International System ◽  
Emerging Market ◽  
Political Influence ◽  
National Currency ◽  
Emerging Market Economies ◽  
Market Economies ◽  
Financial Architecture ◽  
International Financial Architecture

If emerging markets are to achieve their objective of joining the ranks of industrialized, developed countries, they must use their economic and political influence to support radical change in the international financial system. This working paper recommends John Maynard Keynes's "clearing union" as a blueprint for reform of the international financial architecture that could address emerging market grievances more effectively than current approaches. Keynes's proposal for the postwar international system sought to remedy some of the same problems currently facing emerging market economies. It was based on the idea that financial stability was predicated on a balance between imports and exports over time, with any divergence from balance providing automatic financing of the debit countries by the creditor countries via a global clearinghouse or settlement system for trade and payments on current account. This eliminated national currency payments for imports and exports; countries received credits or debits in a notional unit of account fixed to national currency. Since the unit of account could not be traded, bought, or sold, it would not be an international reserve currency. The credits with the clearinghouse could only be used to offset debits by buying imports, and if not used for this purpose they would eventually be extinguished; hence the burden of adjustment would be shared equally - credit generated by surpluses would have to be used to buy imports from the countries with debit balances. Emerging market economies could improve upon current schemes for regionally governed financial institutions by using this proposal as a template for the creation of regional clearing unions using a notional unit of account.

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