Does Debt Management Matter? YES
Debt management can reduce financial
vulnerability by limiting liquidity, and rollover risks.
This note reviews Argentina's debt management strategy,
towards improving the country's credit rating to an
investment grade, providing flexibility, liquidity, and
opportunity. However, the risks of refinancing can be larger
for domestic currency debt, than for foreign currency debt.
Lessons from Argentina's experience suggest that
volatile flows can be dealt with, through prudential
regulation in the banking sector, and overall sound policies
in capital markets. Furthermore, avoiding the conversion of
private debt into public debt, also helped Argentina
overcome the crisis; but perhaps, the biggest challenge is
to develop new indicators of financial vulnerability, which
should put more weight on stocks of debt, and other
financial assets, rather than on flow indicators, such as
the current account deficit.
Saved in:
Bibliographic Details
| Main Author: |
Kiguel, Miguel A. |
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| Language: | English |
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| Published: |
World Bank, Washington, DC
1999-02
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| Subjects: | ARBITRAGE,
BALANCE OF PAYMENTS,
BANKING SECTOR,
BANKING SYSTEM,
BONDS,
BORROWING,
BORROWING COSTS,
CAPITAL CONTROLS,
CAPITAL MARKET,
CAPITAL MARKETS,
CENTRAL BANK,
CONTINGENT LIABILITIES,
CREDIT LINE,
CREDIT RATING,
DEBT,
DEPOSITS,
DEVALUATION,
DEVELOPMENT ECONOMICS,
ECONOMICS,
EXCHANGE RATES,
EXPORTS,
FINANCIAL ASSETS,
FINANCIAL CRISIS,
FINANCIAL MARKETS,
FISCAL DEFICITS,
GDP,
GOVERNMENT BONDS,
INFLATION,
INSURANCE,
INTEREST RATE,
INTEREST RATES,
INTERNATIONAL BANKS,
INTERNATIONAL RESERVES,
LENDER OF LAST RESORT,
LIQUIDITY,
MONEY MARKET FUNDS,
MORAL HAZARD,
MORTGAGE,
PRUDENTIAL REGULATION,
PUBLIC DEBT,
SECURITIES,
SOLVENCY,
STOCKS,
T-BILLS,
TRADING,
TRANSACTIONS COSTS,
TRANSPARENCY,
VOLATILITY,
VULNERABILITY DEBT MANAGEMENT,
FINANCIAL CRISES,
FINANCE & DEBT,
CREDIT RATINGS,
INVESTMENT INCENTIVES,
LIQUIDITY RATIO,
FLEXIBLE PRICING POLICY,
OPPORTUNITY COSTS,
RISK MANAGEMENT,
DOMESTIC DEBT,
DEBT FINANCING,
PRUDENTIAL REGULATIONS,
BANKING DISTRESS,
PRIVATE DEBT,
DEBT STOCKS,
FLOW RATE,
CURRENT ACCOUNT DEFICITS, |
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| Online Access: | http://documents.worldbank.org/curated/en/1999/02/717483/debt-management-matter-yes
https://hdl.handle.net/10986/11496
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