Taking Stock of Risk Management Techniques for Sovereigns [electronic resource] / Claessens, Stijn
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TextPublication details: Washington, D.C., The World Bank, 2005Description: 1 online resource (35 p.)Subject(s): Bank Policy | Banks and Banking Reform | Commodity Prices | Creditworthiness | Currencies and Exchange Rates | Debt Markets | Developing Countries | Emerging Markets | Exchange | Finance and Financial Sector Development | Financial Literacy | Financial Risk | Global Capital | Global Capital Markets | Instruments | Insurance and Risk Mitigation | International Financial Institutions | International Financial Markets | International Markets | Investment | Labor Policies | Natural Disasters | Non Bank Financial Institutions | Private Sector Development | Risk Management | Risk Management Tools | Safety Net | Social Protections and Labor | Sovereign Debt | Sovereign Risk | StockAdditional physical formats: Claessens, Stijn.: Taking Stock of Risk Management Techniques for Sovereigns.Online resources: Click here to access online Abstract: This paper reviews the current state of affairs and thinking on external risk management for developing countries. It tries to identify the reasons behind the limited risk management by sovereigns. Perverse incentives arising from a too generous international safety net, limited access to international financial markets by developing countries arising from low creditworthiness, a limited supply of financial risk management tools suited to developing countries, and a poor supply of skills have inhibited risk management. Another constraint has been the limited attention given to the strategic objectives for risk management. Going forward, the paper identifies actions by international financial markets, countries and international financial institutions that can help improve risk management.
This paper reviews the current state of affairs and thinking on external risk management for developing countries. It tries to identify the reasons behind the limited risk management by sovereigns. Perverse incentives arising from a too generous international safety net, limited access to international financial markets by developing countries arising from low creditworthiness, a limited supply of financial risk management tools suited to developing countries, and a poor supply of skills have inhibited risk management. Another constraint has been the limited attention given to the strategic objectives for risk management. Going forward, the paper identifies actions by international financial markets, countries and international financial institutions that can help improve risk management.
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