Taking Stock of Risk Management Techniques for Sovereigns

The author reviews the current state of affairs and thinking on external risk management for developing countries. He 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 internatio...

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Main Author:	Claessens, Stijn
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTABILITY ACCOUNTING ACCOUNTING RULES ADVERSE SELECTION AGENTS BALANCE SHEET BANKING REGULATION BANKING SYSTEM BANKRUPTCY BOND MARKETS BONDS BORROWING CAPITAL FLOWS CAPITAL MARKETS COMMERCIAL BANKS COMPARATIVE ADVANTAGE CONTAGION CORPORATE GOVERNANCE COST OF CAPITAL CREDIT RISK CREDIT RISKS CURRENCY UNITS DEBT DEBT RELIEF DERIVATIVES DEVELOPED COUNTRIES DISASTERS ECONOMIC GROWTH ECONOMIC STABILITY EXCHANGE RATE FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL RISK FOREIGN EXCHANGE FUTURES ILLIQUIDITY IMPORTS INCOME INFLATION INFORMATION ASYMMETRIES INSURANCE INTEREST RATES INTERNATIONAL BANKS INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL FINANCIAL MARKETS LENDING INSTITUTIONS LIBERALIZATION LOCAL FINANCIAL INSTITUTIONS MACROECONOMIC POLICY MARKET ECONOMIES MATURITIES MORAL HAZARD OIL OIL PRICES OPPORTUNITY COSTS PENSION FUNDS PERVERSE INCENTIVES POLICY ENVIRONMENT POLICY MAKERS POLITICAL ECONOMY PREMIUMS PRICE CHANGES PRICE INDEXES PRICE VARIATIONS PRIVATIZATION PROGRAMS PUBLIC AGENCIES REAL SECTOR RENTS RESERVES RISK ALLOCATION RISK ASSESSMENTS RISK MANAGEMENT RISK PREMIUMS RISK REDUCTION RISK SHARING SAVINGS SOCIAL SECURITY SOVEREIGN RISK STRUCTURAL ADJUSTMENT SUSTAINABILITY TERMS OF TRADE TRADEOFFS VENTURE CAPITAL WILLINGNESS TO PAY
Online Access:	http://documents.worldbank.org/curated/en/2005/04/5758486/taking-stock-risk-management-techniques-sovereigns http://hdl.handle.net/10986/8983

id	okr-10986-8983
recordtype	oai_dc
spelling	okr-10986-89832021-04-23T14:02:42Z Taking Stock of Risk Management Techniques for Sovereigns Claessens, Stijn ACCOUNTABILITY ACCOUNTING ACCOUNTING RULES ADVERSE SELECTION AGENTS BALANCE SHEET BANKING REGULATION BANKING SYSTEM BANKRUPTCY BOND MARKETS BONDS BORROWING CAPITAL FLOWS CAPITAL MARKETS COMMERCIAL BANKS COMPARATIVE ADVANTAGE CONTAGION CORPORATE GOVERNANCE COST OF CAPITAL CREDIT RISK CREDIT RISKS CURRENCY UNITS DEBT DEBT RELIEF DERIVATIVES DEVELOPED COUNTRIES DISASTERS ECONOMIC GROWTH ECONOMIC STABILITY EXCHANGE RATE FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL RISK FOREIGN EXCHANGE FUTURES ILLIQUIDITY IMPORTS INCOME INFLATION INFORMATION ASYMMETRIES INSURANCE INTEREST RATES INTERNATIONAL BANKS INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL FINANCIAL MARKETS LENDING INSTITUTIONS LIBERALIZATION LOCAL FINANCIAL INSTITUTIONS MACROECONOMIC POLICY MARKET ECONOMIES MATURITIES MORAL HAZARD OIL OIL PRICES OPPORTUNITY COSTS PENSION FUNDS PERVERSE INCENTIVES POLICY ENVIRONMENT POLICY MAKERS POLITICAL ECONOMY PREMIUMS PRICE CHANGES PRICE INDEXES PRICE VARIATIONS PRIVATIZATION PROGRAMS PUBLIC AGENCIES REAL SECTOR RENTS RESERVES RISK ALLOCATION RISK ASSESSMENTS RISK MANAGEMENT RISK PREMIUMS RISK REDUCTION RISK SHARING SAVINGS SOCIAL SECURITY SOVEREIGN RISK STRUCTURAL ADJUSTMENT SUSTAINABILITY TERMS OF TRADE TRADEOFFS VENTURE CAPITAL WILLINGNESS TO PAY The author reviews the current state of affairs and thinking on external risk management for developing countries. He 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 author identifies actions by international financial markets, countries, and international financial institutions that can help improve risk management. These actions include GDP-indexed loans and efforts to develop price and weather indexes. 2012-06-25T22:03:33Z 2012-06-25T22:03:33Z 2005-04 http://documents.worldbank.org/curated/en/2005/04/5758486/taking-stock-risk-management-techniques-sovereigns http://hdl.handle.net/10986/8983 English Policy Research Working Paper; No. 3570 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCOUNTABILITY ACCOUNTING ACCOUNTING RULES ADVERSE SELECTION AGENTS BALANCE SHEET BANKING REGULATION BANKING SYSTEM BANKRUPTCY BOND MARKETS BONDS BORROWING CAPITAL FLOWS CAPITAL MARKETS COMMERCIAL BANKS COMPARATIVE ADVANTAGE CONTAGION CORPORATE GOVERNANCE COST OF CAPITAL CREDIT RISK CREDIT RISKS CURRENCY UNITS DEBT DEBT RELIEF DERIVATIVES DEVELOPED COUNTRIES DISASTERS ECONOMIC GROWTH ECONOMIC STABILITY EXCHANGE RATE FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL RISK FOREIGN EXCHANGE FUTURES ILLIQUIDITY IMPORTS INCOME INFLATION INFORMATION ASYMMETRIES INSURANCE INTEREST RATES INTERNATIONAL BANKS INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL FINANCIAL MARKETS LENDING INSTITUTIONS LIBERALIZATION LOCAL FINANCIAL INSTITUTIONS MACROECONOMIC POLICY MARKET ECONOMIES MATURITIES MORAL HAZARD OIL OIL PRICES OPPORTUNITY COSTS PENSION FUNDS PERVERSE INCENTIVES POLICY ENVIRONMENT POLICY MAKERS POLITICAL ECONOMY PREMIUMS PRICE CHANGES PRICE INDEXES PRICE VARIATIONS PRIVATIZATION PROGRAMS PUBLIC AGENCIES REAL SECTOR RENTS RESERVES RISK ALLOCATION RISK ASSESSMENTS RISK MANAGEMENT RISK PREMIUMS RISK REDUCTION RISK SHARING SAVINGS SOCIAL SECURITY SOVEREIGN RISK STRUCTURAL ADJUSTMENT SUSTAINABILITY TERMS OF TRADE TRADEOFFS VENTURE CAPITAL WILLINGNESS TO PAY
spellingShingle	ACCOUNTABILITY ACCOUNTING ACCOUNTING RULES ADVERSE SELECTION AGENTS BALANCE SHEET BANKING REGULATION BANKING SYSTEM BANKRUPTCY BOND MARKETS BONDS BORROWING CAPITAL FLOWS CAPITAL MARKETS COMMERCIAL BANKS COMPARATIVE ADVANTAGE CONTAGION CORPORATE GOVERNANCE COST OF CAPITAL CREDIT RISK CREDIT RISKS CURRENCY UNITS DEBT DEBT RELIEF DERIVATIVES DEVELOPED COUNTRIES DISASTERS ECONOMIC GROWTH ECONOMIC STABILITY EXCHANGE RATE FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL RISK FOREIGN EXCHANGE FUTURES ILLIQUIDITY IMPORTS INCOME INFLATION INFORMATION ASYMMETRIES INSURANCE INTEREST RATES INTERNATIONAL BANKS INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL FINANCIAL MARKETS LENDING INSTITUTIONS LIBERALIZATION LOCAL FINANCIAL INSTITUTIONS MACROECONOMIC POLICY MARKET ECONOMIES MATURITIES MORAL HAZARD OIL OIL PRICES OPPORTUNITY COSTS PENSION FUNDS PERVERSE INCENTIVES POLICY ENVIRONMENT POLICY MAKERS POLITICAL ECONOMY PREMIUMS PRICE CHANGES PRICE INDEXES PRICE VARIATIONS PRIVATIZATION PROGRAMS PUBLIC AGENCIES REAL SECTOR RENTS RESERVES RISK ALLOCATION RISK ASSESSMENTS RISK MANAGEMENT RISK PREMIUMS RISK REDUCTION RISK SHARING SAVINGS SOCIAL SECURITY SOVEREIGN RISK STRUCTURAL ADJUSTMENT SUSTAINABILITY TERMS OF TRADE TRADEOFFS VENTURE CAPITAL WILLINGNESS TO PAY Claessens, Stijn Taking Stock of Risk Management Techniques for Sovereigns
relation	Policy Research Working Paper; No. 3570
description	The author reviews the current state of affairs and thinking on external risk management for developing countries. He 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 author identifies actions by international financial markets, countries, and international financial institutions that can help improve risk management. These actions include GDP-indexed loans and efforts to develop price and weather indexes.
format	Publications & Research :: Policy Research Working Paper
author	Claessens, Stijn
author_facet	Claessens, Stijn
author_sort	Claessens, Stijn
title	Taking Stock of Risk Management Techniques for Sovereigns
title_short	Taking Stock of Risk Management Techniques for Sovereigns
title_full	Taking Stock of Risk Management Techniques for Sovereigns
title_fullStr	Taking Stock of Risk Management Techniques for Sovereigns
title_full_unstemmed	Taking Stock of Risk Management Techniques for Sovereigns
title_sort	taking stock of risk management techniques for sovereigns
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/04/5758486/taking-stock-risk-management-techniques-sovereigns http://hdl.handle.net/10986/8983
_version_	1764407221773402112

Taking Stock of Risk Management Techniques for Sovereigns

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