Emerging markets
IMF develops flexible approach to funding to meet drawdowns, annual report says
Annual report says IMF has taken steps to improve the flexibility of funding instruments in face of ‘fragile recovery’; expects continued strong demand for funding
Korean governor criticises local crisis resolution
Choongsoo Kim says a local resolution to the European debt crisis could harm emerging markets; should harness the growth in these regions instead
ECB paper analyses factors driving portfolio flows
Working paper studies time-varying drivers of capital flows to emerging markets; finds investors are more sensitive to local factors during market stress, while extreme stress can cause a panic
BIS raises fears over lower global growth trajectory
Bank for International Settlements Quarterly Review says global growth outlook deteriorated further over the quarter; warns of diminishing benefits to unconventional monetary policy
IMF paper warns fiscal policy is not sufficient to counter capital surges
Working paper finds countercyclical fiscal policy would not have been able to fully counter large capital inflows into many countries in emerging Europe before the financial crisis
IMF paper studies emerging market bond spreads
Working paper tests different explanatory variables for emerging market bond spreads over time; finds importance may change based on business cycle and external factors
Bank of Finland paper examines reasons for business cycle co-movement
Discussion paper suggests thinking of growth performance of economies as ‘coupled’ or ‘de-coupled’ is overly simplistic; identifies a number of factors contributing to interdependence
Central Bank of Chile paper tests evidence of asset price booms
Researcher finds evidence that capital flows drive asset price booms; identifies factors that mitigate this effect but says capital controls are not effective
IMF paper evaluates reserve adequacy in emerging markets
Working paper studies the determinants of reserve holdings in emerging markets and small islands; proposes measure of reserve adequacy
IMF working paper warns of dangers in sovereign debt restructuring
Researchers find debt restructurings have adverse impact on economic growth; say debt sustainability is a crucial consideration
Central Bank of Chile paper identifies causes of sudden capital flows
Working paper assesses factors leading to sudden surges of capital in and out of economies; finds the majority of cases are driven primarily by changes in debt flows
RBI paper measures threshold of sustainable current account deficit in India
Working paper warns of risks posed by large current account deficits; finds sustainable level of deficit has risen since balance of payments crisis in the 1990s
Bank of Korea strikes melancholy note in policy announcement
South Korea notes struggling economic scenes both at home and abroad; MPC decides to hold benchmark rate as a consequence
IMF paper studies effect of global environment on domestic bond yields
Working paper analyses link between global economic conditions and emerging market domestic bond yields; finds financial market turmoil raises sensitivity to government spending increases
BIS paper links funding to emerging economies and stock market volatility
Working paper studies funding flows between emerging market central banks and investors during stock market calm and volatility; suggests this reinforces risk-on and risk-off markets
IMF paper finds changing resilience of emerging markets to financial shocks
Working paper assesses net change in ability of emerging markets to absorb financial shocks; says improved economic fundamentals are offset by vulnerabilities due to inflexible exchange rates
IMF paper suggests policies to sustain fast growth in India
Working paper applies lessons from fast growth in 2000s to current Indian growth slowdown; warns that progress will continue to slow if policy-makers do not act quickly
IMF calls for policy action to counter looming downside risks
Latest World Economic Outlook and Global Financial Stability Report say further action is necessary by policy-makers in Europe, the US and emerging markets, as downside risks 'loom large'
ECB paper analyses risk-sharing in emerging markets
Working paper finds evidence of pro-cyclicality of capital gains on domestic stock markets; argues countries can hedge against risk by encouraging foreign investment
Russia takes lead in gold purchases in May
Latest World Gold Council figures show Bank of Russia increased gold reserves by largest amount in May; council says emerging markets purchases viewed as a part of ‘broader theme’
Mexican deputy governor weighs challenges facing economy
Bank of Mexico’s Manuel Sánchez examines effect of capital inflows and eurozone problems on Mexican economy; says growth expected to continue at a moderate rate
IMF paper studies emerging market debt restructuring
Policy paper reviews causes and consequences of emerging market sovereign debt restructurings; identifies certain elements that can make process less painful
King laments growing problems in global economy
BoE governor says worsening situation in emerging economies, slowing US growth and continued eurozone trouble leave him “pessimistic”; Treasury Committee member confronts MPC over decision-making
IMF highlights problems with overreaction to financial crises
Working paper studies data on banking crises; finds that a strong macroeconomic response to a banking crisis may reduce incentive for banks to restructure