Government Contingent Liabilities And The Measurement Of Fiscal Impact

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 145196711X
Total Pages : 40 pages
Book Rating : 4.11/5 ( download)

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Download or read book Government Contingent Liabilities and the Measurement of Fiscal Impact written by International Monetary Fund and published by International Monetary Fund. This book was released on 1990-06-01 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Conventional fiscal accounting methodologies do not appropriately account for governments’ noncash policies, such as their contingent liabilities. When these liabilities are called, budget costs can be large, as evidenced by the United States’ saving and loan crisis. In general, deficit measures may underestimate the macroeconomic impact of government policies, promoting the substitution of noncash for cash expenditure and increasing future financing requirements. The paper describes extended deficit measures to address the problem, but notes their limited practical value. Nonetheless, some alternative methods of valuing contingent liabilities are proposed to gauge fiscal impact and facilitate budgetary control.

Author : Hana Polackova Brixi
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 390 pages
Book Rating : 4./5 ( download)

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Download or read book Government at Risk written by Hana Polackova Brixi and published by World Bank Publications. This book was released on 2002 with total page 390 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many governments have faced serious instability as a result of their contingent liabilities. But conventional public finance analysis and institutions fail to address such fiscal risks. This book aims to provide motivation and practical guidance to governments seeking to improve theirmanagement of fiscal risks. The book addresses some of the difficult analytical and institutional challenges that face reformers tooling up to manage government fiscal risks. It discusses the inadequacies of conventional practices as well as recent advances in dealing with fiscal risk.

Author : Ms.Elva Bova
Publisher : International Monetary Fund
ISBN 13 : 1498303609
Total Pages : 55 pages
Book Rating : 4.06/5 ( download)

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Download or read book The Fiscal Costs of Contingent Liabilities written by Ms.Elva Bova and published by International Monetary Fund. This book was released on 2016-02-08 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: We construct the first comprehensive dataset of contingent liability realizations in advanced and emerging markets for the period 1990–2014. We find that contingent liability realizations are a major source of fiscal distress. The average fiscal cost of a contingent liability realization is 6 percent of GDP but costs can be as high as 40 percent for major financial sector bailouts. Contingent liability realizations are correlated among each other and tend to occur during periods of growth reversals and crises, accentuating pressure on the budget during already difficult times. Countries with stronger institutions are able to better control and address the underlying risks so that they are less exposed to contingent liability realizations.

Author : Hana Polackova
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 39 pages
Book Rating : 4./5 ( download)

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Download or read book Contingent Government Liabilities written by Hana Polackova and published by World Bank Publications. This book was released on 1998 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: October 1998 Many governments have faced serious fiscal instabilities as a result of their growing contingent liabilities. But conventional fiscal analysis and institutions fall short in addressing contingent fiscal risks. What approaches in fiscal analysis and standards for public sector management would foster sound fiscal performance? And how can policymakers be made accountable for recognizing the long-term costs of both direct and contingent forms of government activity in their decisions? Governments are increasingly exposed to fiscal risks and uncertainties for three main reasons: * The increasing volume and volatility of international flows of private capital. * The state's transformation from financing services to guaranteeing that the private sector will achieve particular outcomes. * Moral hazards arising in markets because the government is perceived to have residual responsibility for market outcomes. Sources of fiscal risk may be direct or contingent (a liability only if a particular event occurs). Whether direct or contingent, they are either explicit (recognized as a government liability by law or by contract) or implicit (a moral obligation reflecting public expectations and pressure from interest groups). The recent Asian crisis revealed that major moral hazards exist in markets and that sizable hidden fiscal risks may arise from contingent forms of government support. Governments must understand and know how to handle contingent liabilities if they are to avoid the danger of sudden fiscal instability and realize their long-term policy objectives. They can reduce fiscal risks by incorporating contingent liabilities into their analytical, policy, and institutional public finance frameworks. Governments can address fiscal risk through three channels in particular, says Polackova: * By including contingent and implicit financial risks in their fiscal analysis and (to deter moral hazard in the market) by publicly acknowledging the limits of state responsibilities. * By reflecting the cost of contingent liabilities in policy choices, budgeting, financial planning, reporting, and auditing. * By developing institutional capacity to evaluate, regulate, control, and prevent financial risk in both the public and private sectors. Given the increasingly serious implications of contingent government liabilities for the fiscal outlook of countries, Polackova argues that it is time for the World Bank, the International Monetary Fund, and others to: * Incorporate government contingent fiscal risks in their analysis of a country's fiscal sustainability, policies, and institutions. * Require countries to disclose information regarding their exposure to contingent fiscal risks. * Help countries embrace contingent liabilities in their analytical, policy, and institutional public finance frameworks. This paper-a product of the Poverty Reduction and Economic Management Sector Unit, Europe and Central Asia Region-is part of a larger effort in the region to enhance the Bank's analytical and operational work in public finance. The author may be contacted at [email protected].

Author : Christopher M. Towe
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4.65/5 ( download)

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Download or read book Optimal Fiscal Policy and Government Provision of Contingent Liabilities written by Christopher M. Towe and published by International Monetary Fund. This book was released on 1989-10-12 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: The optimal provision of loan guarantees or deposit insurance is examined in the context of an overlapping generations model. It is demonstrated that even in the face of a market imperfection that precludes diversification of the private sector’s loan portfolio to eliminate risk, full government guarantee of private sector loans (or deposits) is suboptimal. The results of the paper suggest that although some degree of guarantee is appropriate, the design of such policies should be tempered to avoid an inefficient level of capital accumulation.

Author : Aliona Cebotari
Publisher : INTERNATIONAL MONETARY FUND
ISBN 13 : 9781451871036
Total Pages : 60 pages
Book Rating : 4.31/5 ( download)

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Download or read book Contingent Liabilities: Issues and Practice written by Aliona Cebotari and published by INTERNATIONAL MONETARY FUND. This book was released on 2008-10-01 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Contingent liabilities have gained prominence in the analysis of public finance. Indeed, history is full of episodes in which the financial position of the public sector is substantially altered-or its true nature uncovered-as a result of government bailouts of financial or nonfinancial entities, in both the private and the public sector. The paper discusses theoretical and practical issues raised by contingent liabilities, including the rationale for taking them on, how to safeguard against the fiscal risks associated with them, how to account and budget for them, and how to disclose them. Country experiences are used to illustrate ways these issues are addressed in practice and challenges faced. The paper also points to good practices related to the mitigation, management and disclosure of risks from contingent liabilities.

Author : Mrs.Sage De Clerck
Publisher : International Monetary Fund
ISBN 13 : 1498379214
Total Pages : 470 pages
Book Rating : 4.12/5 ( download)

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Download or read book Government Finance Statistics Manual 2014 written by Mrs.Sage De Clerck and published by International Monetary Fund. This book was released on 2015-03-10 with total page 470 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 2007–09 international financial crisis underscored the importance of reliable and timely statistics on the general government and public sectors. Government finance statistics are a basis for fiscal analysis and they play a vital role in developing and monitoring sound fiscal programs and in conducting surveillance of economic policies. The Government Finance Statistics Manual 2014 represents a major step forward in clarifying the standards for compiling and presenting fiscal statistics and strengthens the worldwide effort to improve public sector reporting and transparency.

Author : International Monetary Fund. Fiscal Affairs Dept.
Publisher : International Monetary Fund
ISBN 13 : 1498334520
Total Pages : 45 pages
Book Rating : 4.25/5 ( download)

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Download or read book Fiscal Risks - Sources, Disclosure, and Management written by International Monetary Fund. Fiscal Affairs Dept. and published by International Monetary Fund. This book was released on 2008-05-31 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: A number of member countries have expressed interest in advice regarding disclosure and management of fiscal risks (defined as the possibility of deviations of fiscal outcomes from what was expected at the time of the budget or other forecast). This paper analyzes the main sources of fiscal risks and—building on an overview of existing practices in a wide range of countries—provides practical suggestions in this area, including a possible Statement of Fiscal Risks and a set of Guidelines for Fiscal Risk Disclosure and Management.

Author : Mr.J. D. Craig
Publisher : International Monetary Fund
ISBN 13 : 155775697X
Total Pages : 50 pages
Book Rating : 4.78/5 ( download)

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Download or read book Transparency in Government Operations written by Mr.J. D. Craig and published by International Monetary Fund. This book was released on 1998-02-03 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Transparency in government operations is widely regarded as an important precondition for macroeconomic fiscal sustainability, good governance, and overall fiscal rectitude. Notably, the Interim Committee, at its April and September 1996 meetings, stressed the need for greater fiscal transparency. Prompted by these concerns, this paper represents a first attempt to address many of the aspects of transparency in government operations. It provides an overview of major issues in fiscal transparency and examines the IMF's role in promoting transparency in government operations.

Author : Mr.Andreas A. Jobst
Publisher : International Monetary Fund
ISBN 13 : 1475557531
Total Pages : 93 pages
Book Rating : 4.34/5 ( download)

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Download or read book Systemic Contingent Claims Analysis written by Mr.Andreas A. Jobst and published by International Monetary Fund. This book was released on 2013-02-27 with total page 93 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent global financial crisis has forced a re-examination of risk transmission in the financial sector and how it affects financial stability. Current macroprudential policy and surveillance (MPS) efforts are aimed establishing a regulatory framework that helps mitigate the risk from systemic linkages with a view towards enhancing the resilience of the financial sector. This paper presents a forward-looking framework ("Systemic CCA") to measure systemic solvency risk based on market-implied expected losses of financial institutions with practical applications for the financial sector risk management and the system-wide capital assessment in top-down stress testing. The suggested approach uses advanced contingent claims analysis (CCA) to generate aggregate estimates of the joint default risk of multiple institutions as a conditional tail expectation using multivariate extreme value theory (EVT). In addition, the framework also helps quantify the individual contributions to systemic risk and contingent liabilities of the financial sector during times of stress.