Insurance underwriter or financial development fund: what role for reserve pooling in Latin America?

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cepal.bibLevelDocumento Completo
cepal.callNumberINT UN/FI 30(186/2006)
cepal.callNumberLC/L.2621-P
cepal.divisionEngEconomic Development Division
cepal.divisionSpaDivisión de Desarrollo Económico
cepal.docTypeSeries
cepal.idSade28011
cepal.jobNumberS0600797 E
cepal.physicalDescriptiongráficos, tablas
cepal.projectProyecto Strengthening the Role of Regional and National Financial Institutions for Sustainable Social Development GER/03/002
cepal.regionalOfficeSantiago
cepal.saleNumber06.II.G.145
cepal.topicEngFINANCIAL AND MONETARY SECTOR
cepal.topicEngFINANCING FOR DEVELOPMENT
cepal.topicSpaSECTOR FINANCIERO Y MONETARIO
cepal.topicSpaFINANCIAMIENTO PARA EL DESARROLLO
cepal.workareaEngECONOMIC DEVELOPMENT
cepal.workareaEngSTATISTICS
cepal.workareaSpaDESARROLLO ECONÓMICO
cepal.workareaSpaESTADÍSTICAS
dc.contributor.authorEichengreen, Barry
dc.contributor.entityGerman Agency for Technical Cooperation
dc.contributor.entityNU. CEPAL
dc.contributor.entityNU. CEPAL. División de Desarrollo Económico
dc.coverage.spatialEngLATIN AMERICA
dc.coverage.spatialSpaAMERICA LATINA
dc.date.accessioned2014-01-02T15:43:43Z
dc.date.available2014-01-02T15:43:43Z
dc.date.issued2006-11
dc.descriptionIncludes bibliography
dc.description.abstractAbstract The unprecedented accumulation of international reserves by emerging markets raises the question of how to best utilize these funds; in particular if they should be held as a war chest to guard against the risk of financial crisis or if they should be used to recapitalize and strengthen weak banking systems. A third issue is if the resource cost could be limited by pooling the holdings of different central banks and if so, to what objectives should this reserve pool be put. This paper considers these questions with reference to the countries participating in the Latin American Reserve Fund (FLAR). It explores two routes through which the pooling of reserves through FLAR could enhance stability and welfare in Latin America. First, the reserve pool could be used for emergency lending in response to sudden stops. Insofar as the incidence of sudden stops differs across countries, pooling would allow the same reserves to support a larger volume of emergency lending. However, the paper discusses how such a scheme would face significant obstacles due both to the bunching of sudden stops temporally and regionally and to moral hazard problems which are stronger in the case of self-regulating entities like FLAR. The second, more promising alternative that the paper analyses, is the use of a portion of the reserve pool, along with borrowed funds, to purchase contingent debt securities issued by Latin American governments and corporations: domestic-currency inflationindexed bonds, GDP-indexed bonds, commodity-price-indexed bonds. This would help to solve the coordination/first-mover problem that limits the liquidity of markets in these instruments and hinders their acceptance by private investors. In any case, the idea is that neither initiative should be thought of in stand-alone terms. In addition to creating an expanded reserve pool for use in emergency lending, governments could also push ahead with issuing contingent debt securities that reduce their vulnerability to disturbances.
dc.formatTexto
dc.format.extent51 páginas.
dc.format.mimetypeapplication/pdf
dc.identifier.isbn9211216168
dc.identifier.unSymbolLC/L.2621-P
dc.identifier.urihttps://hdl.handle.net/11362/5160
dc.language.isoeng
dc.physicalDescription51 p. : gráfs., tabls.
dc.publisherECLAC
dc.publisher.placeSantiago
dc.relation.isPartOfSeriesSerie Financiamiento del Desarrollo
dc.relation.isPartOfSeriesNo186
dc.rights.coarDisponible
dc.subject.unbisEngECONOMIC STABILIZATION
dc.subject.unbisEngEMERGING MARKETS
dc.subject.unbisEngFINANCIAL POLICY
dc.subject.unbisEngINSURANCE
dc.subject.unbisEngINTERNATIONAL FINANCIAL INSTITUTIONS
dc.subject.unbisEngMONETARY RESERVES
dc.subject.unbisEngMONETARY SYSTEMS
dc.subject.unbisEngFINANCIAL RESOURCES
dc.subject.unbisSpaESTABILIZACION ECONOMICA
dc.subject.unbisSpaINSTITUCIONES FINANCIERAS INTERNACIONALES
dc.subject.unbisSpaMERCADOS EMERGENTES
dc.subject.unbisSpaPOLITICA FINANCIERA
dc.subject.unbisSpaRESERVAS MONETARIAS
dc.subject.unbisSpaSEGUROS
dc.subject.unbisSpaSISTEMAS MONETARIOS
dc.subject.unbisSpaRECURSOS FINANCIEROS
dc.titleInsurance underwriter or financial development fund: what role for reserve pooling in Latin America?
dc.type.coarlibro
dspace.entity.typePublication
relation.isAuthorOfPublication4a6d93ba-7575-4a96-b0fa-2faa57860464
relation.isAuthorOfPublication.latestForDiscovery4a6d93ba-7575-4a96-b0fa-2faa57860464
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