Controlling currency mismatches in emerging markets / Morris Goldstein and Philip Turner.

Format:

Book

Author/Creator:

Goldstein, Morris, 1944-

Contributor:

Turner, Philip, 1950-

Language:

English

Subjects (All):

Foreign exchange rates--Developing countries.

Foreign exchange rates.

Foreign exchange administration.

Developing countries.

Foreign exchange administration--Developing countries.

Monetary policy--Developing countries.

Monetary policy.

Physical Description:

xvi, 164 pages : illustrations ; 23 cm

Place of Publication:

Washington, DC : Institute for International Economics, 2004.

Contents:

Original Sin Hypothesis 5

2 Why Currency Mismatches Matter 11

3 Measuring Currency Mismatch: Beyond Original Sin 21

Original Sin: A Misleading Measure 21

4 Aggregate Effective Currency Mismatch 37

New Measure of Aggregate Effective Currency Mismatch 42

Modification of AECM 51

5 Coping with Potential Currency Mismatches 57

6 Role of National Macroeconomic Policies and Currency Regimes 63

Monetary Policy and Inflation 64

Currency Regime 67

Fiscal Policies 69

Debt and Reserve Management Policies 71

7 Role of Institutional Factors and Microeconomic Incentives 77

Bond Markets 79

Prudential Oversight of Financial Institutions 82

Regulation of Banks in Major Lending Centers 85

Regulation of Banks in Borrowing Countries 89

Aggregate Mismatches in the Banking System 97

Regulations of Other Financial Institutions 98

Rules for Nonfinancial Corporations? 102

8 International Solutions to Currency Mismatching? 105

9 Reducing Currency Mismatching: A Domestic Agenda 113

Appendix A Measuring Mismatches: Some Cautionary Notes 123

Appendix B Evolution of the Original Sin Hypothesis 135

Table 2.1 Proxies for currency mismatches before the Asian crisis, 1995-99 12

Table 2.2 Borrowing by domestic banks from international banks, 1995-2002 13

Table 2.3 Domestic bank credit to the private sector 17

Table 3.1 Measures of original sin by country groupings, simple average 22

Table 3.2 Export openness, 1994-2002 23

Table 3.3 Bond market development, end-2001 26

Table 3.4 Foreign banks' consolidated claims, local and international, 1990-2003 28

Table 3.5 Emerging-market financing, all sectors, 1997-2001 31

Table 4.1 Australia: Foreign-currency exposure by financial sector, end-June 2001 39

Table 4.2 Thailand: Intersectoral asset and liability position, end-December 1996 40

Table 4.3 Net foreign-currency assets, 1994-2002 45

Table 4.4 Foreign-currency share of total debt, 1994-2002 47

Table 4.5 Original AECM estimates, 1994-2002 48

Table 4.6 Modified AECM estimates, 1994-2002 50

Table 4.7 Total debt as a percent of GDP, 1994-2002 52

Table 4.8 Original sin ratio in emerging economies 55

Table 5.1 Foreign exchange turnover 58

Table 5.2 Top 10 countries in bond trading volume, 2001 60

Table 5.3 Domestic debt securities outstanding, 1994-2002 61

Table 6.1 Type of domestic debt at issuance, end-2000 65

Table 6.2 Outstanding government debt by type, end-2001 73

Table 7.1 Guidelines or regulations for currency mismatches in banks 91.

Notes:

Includes bibliographical references (pages 145-152) and index.

ISBN:

0881323608

OCLC:

54817137