Country Insurance : Reducing Systemic Vulnerabilities in Latin America and the Caribbean

Country Insurance : Reducing Systemic Vulnerabilities in Latin America and the Caribbean

This study begins from the premise that output and consumption are more volatile and prone to sharp contractions in developing than in high-income economies. This suggests that developing countries are somehow "underinsured" and may thus...

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Bibliographic Details
Main Author:	World Bank
Format:	Other Financial Accountability Study
Language:	English
Published:	Washington, DC 2012
Subjects:	ACCESS TO INSURANCE ADVANCED ECONOMIES AGENCY PROBLEM ASSET CLASS ASSET MANAGEMENT ASSET POSITION ASSET PRICES ASSET-LIABILITY MANAGEMENT ASYMMETRIC INFORMATION BANK ASSETS BANKING SECTOR BASIS POINTS BOND BOND ISSUE BOND PRICES BOND SPREADS BONDHOLDERS BORROWER BORROWING COSTS BUSINESS CYCLE BUSINESS CYCLES CAPITAL ACCOUNT CAPITAL FLOWS CAPITAL INFLOWS CAPITAL OUTFLOW CASH FLOW CASH FLOWS CATASTROPHE BOND CATASTROPHE BONDS CENTRAL BANK COLLATERAL COMMODITY COMMODITY PRICES CONTINGENT DEBT CONTINGENT LIABILITIES CORPORATE DEBT COUNTRY RISK COUPON COUPONS CREDIBILITY CREDIT LINE CREDIT LINES CREDIT RATING CREDIT RATINGS CREDIT RECORDS CREDIT RISK CREDITWORTHINESS CURRENCY CURRENCY MISMATCH CURRENCY MISMATCHES CURRENCY RISK DATA AVAILABILITY DEBT DEBT BURDEN DEBT CRISES DEBT ISSUANCE DEBT MANAGEMENT DEBT PAYMENTS DEBT RATIOS DEBT SERVICE DEBTOR DEBTOR COUNTRIES DEBTORS DEBTS DEFAULTS DERIVATIVE DERIVATIVE MARKET DERIVATIVE MARKETS DERIVATIVES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT BANK DISCOUNT RATE DOLLAR DEBT DOMESTIC BANKING DOMESTIC CREDIT DOMESTIC DEBT DOMESTIC FINANCIAL MARKETS DOMESTIC MARKETS ECONOMIC DEVELOPMENT EMERGING ECONOMIES EMERGING ECONOMY EMERGING MARKET EMERGING MARKET BOND EMERGING MARKETS EXPORTERS EXPOSURE EXTERNAL DEBT FINANCIAL ASSETS FINANCIAL CONTAGION FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOWS FINANCIAL INNOVATION FINANCIAL INSTITUTION FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL SAVINGS FINANCIAL SHOCK FINANCIAL SHOCKS FISCAL POLICIES FLEXIBLE EXCHANGE RATE FOREIGN BANKS FOREIGN CURRENCIES FOREIGN CURRENCY GLOBAL BOND GLOBAL BOND INDEX GLOBAL MARKETS GOVERNMENT BOND GOVERNMENT BOND YIELD GOVERNMENT BONDS GOVERNMENT FINANCES GOVERNMENT POLICIES HEDGES HOLDING HOLDINGS HUMAN CAPITAL INCOME FLOW INCOME GROUPS INCOME INEQUALITY INCOME LEVEL INCOME SHOCK INCOME SHOCKS INDEXED BOND INDEXED BONDS INEFFICIENT MARKETS INFLATION INSTRUMENT INSURANCE INSURANCE POLICIES INSURANCE POLICY INSURANCE PREMIUM INSURANCE PREMIUMS INTEREST RATE INTEREST RATES INTERNATIONAL BANKS INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL CREDIT INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL INTEREST INTERNATIONAL MARKETS INVESTING ISSUANCE LENDER LENDER OF LAST RESORT LEVY LIABILITY COMPOSITION LIMITED LIABILITY LIMITED LIABILITY COMPANY LIQUID ASSETS LIQUID MARKET LIQUIDATION LIQUIDITY LIQUIDITY CRISES LIQUIDITY CRISIS LIQUIDITY RISK LLC LOAN LOCAL CURRENCIES LOCAL CURRENCY LOCAL FINANCIAL MARKETS LOCAL GOVERNMENT LOW-INCOME COUNTRIES MACROECONOMIC VOLATILITY MARKET ACCESS MARKET FAILURES MARKET VALUE MATURITY MONETARY FUND MORAL HAZARD MULTILATERAL DEVELOPMENT NATURAL DISASTER NATURAL DISASTERS NEGATIVE INCOME SHOCKS NEGATIVE SHOCK NEGATIVE SHOCKS OIL PRICES OPEN ECONOMY OUTPUT OUTPUT LOSS OUTSIDE ASSISTANCE OUTSTANDING DEBT PORTFOLIO PRICE MOVEMENTS PRIVATE CAPITAL PRIVATE DEBT PRIVATE INVESTMENTS PRIVATE MARKETS PUBLIC DEBT PUBLIC DEBT MANAGEMENT PUBLIC SPENDING PUT OPTION REAL EXCHANGE RATE REPAYMENTS REPO RESERVE RESERVES RETURN RISK AVERSION RISK DIVERSIFICATION RISK MANAGEMENT RISK POOLING RISK PREMIUMS RISK-TAKING CAPACITY SAFETY NET SAFETY NETS SECONDARY TRADING SECURITIES SHOCKS TO INCOME SHORT MATURITIES SHORT-TERM DEBT SMALL COUNTRIES SOLVENCY SOVEREIGN DEBT SOVEREIGN LIABILITIES SOVEREIGN RISK STOCKS SWAP SWAPS TAX TRANSACTION TRANSACTION COSTS TRANSPARENCY TREASURY TREASURY BILLS TURNOVER UNDERLYING ASSET WORLD DEVELOPMENT INDICATORS
Online Access:	http://documents.worldbank.org/curated/en/2008/03/9526944/country-insurance-reducing-systemic-vulnerabilities-latin-america-caribbean-latin-america-caribbean-region-country-insurance-reducing-systemic-vulnerabilities http://hdl.handle.net/10986/8010

Description
Summary:	This study begins from the premise that output and consumption are more volatile and prone to sharp contractions in developing than in high-income economies. This suggests that developing countries are somehow "underinsured" and may thus need to invest more in "country insurance" policies. To shed some light on this issue, the author begin by providing in the first chapter evidence of the excessive volatility faced by developing countries in general (and Latin American and Caribbean, LAC, countries in particular) and then discuss some of the welfare costs associated with such volatility. In second chapter, the author focus on the main trade-offs and on the strategic choices confronted by developing countries if they decide to increase their resilience to external shocks. Finally, in the third chapter, the author look at different policy options, focusing on how the international financial institutions (IFIs) in general and the World Bank in particular can help developing countries' reduce their vulnerability to external shocks. While excessive volatility in developing countries affects both government and the private sectors, this study limits its focus to the government sector. The private sector challenges will be addressed in future research.