A New Model for Market-Based Regulation of Subnational Borrowing : The Mexican Approach

Faced with weak sub-national finances that pose a risk to macroeconomic stability, Mexico's federal government in April 2000 established an innovative incentive framework to bring fiscal discipline to state and municipal governments. That framework is based on two pillars: an explicit renunciat...

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Bibliographic Details
Main Authors:	Giugale, Marcelo, Korobow, Adam, Webb, Steven
Format:	Publications & Research
Language:	en_US
Published:	World Bank, Washington, DC 2015
Subjects:	accounting bank capital bank lending bank loans banking supervision banking system bankruptcy bankruptcy laws banks borrowing business cycles capital formation collateralization commercial banks competitive markets contingent liabilities cost of capital credit markets credit ratings current expenditures debt Decentralization demand curve demand elasticity deposits development banks disposable income equilibrium expected value externalities externality financial markets financial performance foreign exchange GDP gross revenue Inelastic Demand institutional development interest rate interest rate effect interest rates macroeconomic stability mandates marginal cost marginal revenue market forces moral hazard municipal governments municipalities negative externalities oil opportunity cost profit maximization public debt public good public services rating agencies regulatory framework regulatory regimes return on equity revenue sharing risk assessments risk of default subnational finances subnational governments technical assistance transparency voters zero elasticity risk management incentives local officials federal funds markets creditworthiness institutional framework credibility capital adequacy default rates
Online Access:	http://hdl.handle.net/10986/21456

Internet

http://hdl.handle.net/10986/21456

A New Model for Market-Based Regulation of Subnational Borrowing : The Mexican Approach

Internet

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