David Amiel, Paul-Adrien Hyppolite, Sunday, March 15, 2015 - 00:00
S. M. Ali Abbas, Laura Blattner, Mark De Broeck, Asmaa El-Ganainy, Malin Hu, Monday, October 27, 2014 - 00:00
Gaston Gelos, Hiroko Oura, Saturday, August 23, 2014 - 00:00
The landscape of portfolio investment in emerging markets has evolved considerably over the past 15 years. Financial markets have deepened and become more internationally integrated. The mix of global investors has also changed, with more money intermediated by mutual funds. This column explains that these changes have made capital flows and asset prices in these economies more sensitive to global financial shocks. However, broad-based financial deepening and improved institutions can enhance the resilience of emerging-market economies.
Julián Caballero, Ugo Panizza, Andrew Powell, Wednesday, April 2, 2014 - 00:00
In recent years credit growth in Latin America has been very strong, and countries have become more reliant on foreign bond issuances. This column argues that these phenomena are linked, and may have led to vulnerabilities which domestic and international supervisors are not well-equipped to assess. There is no systematic information on firms’ currency mismatches and hedging activities, and none that includes those of subsidiaries that may be located in other jurisdictions, preventing an accurate analysis of the true risks.
Ricardo Hausmann, Ugo Panizza, Sunday, February 21, 2010 - 00:00
Is “original sin”, a situation in which the domestic currency is not used to borrow abroad or to borrow long-term even domestically, no longer a problem? This column argues that, while original sin has diminished and countries are making greater use of their domestic bond market, foreign currency debt is still too risky to be sensible.