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 flexibil...

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Main Author:	Kiguel, Miguel A.
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
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
Online Access:	http://documents.worldbank.org/curated/en/1999/02/717483/debt-management-matter-yes http://hdl.handle.net/10986/11496

id	okr-10986-11496
recordtype	oai_dc
spelling	okr-10986-114962021-06-14T11:03:36Z Does Debt Management Matter? YES Kiguel, Miguel A. 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 CAPITAL MARKET PRIVATE DEBT PUBLIC DEBT DEBT STOCKS FINANCIAL ASSETS FLOW RATE CURRENT ACCOUNT DEFICITS 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. 2012-08-13T15:13:41Z 2012-08-13T15:13:41Z 1999-02 http://documents.worldbank.org/curated/en/1999/02/717483/debt-management-matter-yes http://hdl.handle.net/10986/11496 English PREM Notes; No. 17 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research Latin America & Caribbean Argentina
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	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 CAPITAL MARKET PRIVATE DEBT PUBLIC DEBT DEBT STOCKS FINANCIAL ASSETS FLOW RATE CURRENT ACCOUNT DEFICITS
spellingShingle	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 CAPITAL MARKET PRIVATE DEBT PUBLIC DEBT DEBT STOCKS FINANCIAL ASSETS FLOW RATE CURRENT ACCOUNT DEFICITS Kiguel, Miguel A. Does Debt Management Matter? YES
geographic_facet	Latin America & Caribbean Argentina
relation	PREM Notes; No. 17
description	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.
format	Publications & Research :: Brief
author	Kiguel, Miguel A.
author_facet	Kiguel, Miguel A.
author_sort	Kiguel, Miguel A.
title	Does Debt Management Matter? YES
title_short	Does Debt Management Matter? YES
title_full	Does Debt Management Matter? YES
title_fullStr	Does Debt Management Matter? YES
title_full_unstemmed	Does Debt Management Matter? YES
title_sort	does debt management matter? yes
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/1999/02/717483/debt-management-matter-yes http://hdl.handle.net/10986/11496
_version_	1764416944120791040

Does Debt Management Matter? YES

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