February 2017

04Feb

Corporate Governance: Challenges For Latin America

By Fernando Lefort & Eduardo Walker Corporate Governance relates to mechanisms through which providers of resources to the firm get their share of resources in return. Adequate governance practices help develop capital markets and assist market forces in attaining efficient contracts. Convincing evidence exists that well developed capital markets have an important impact on economic performance, growth and productivity. Our motivation for studying the corporate governance challenges faced by Latin America partly arises from a conviction that academic research on...

February 4, 2017
Articles, Corporate Governance, Investing,
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04Feb

The Effects Of Economic And Political Shocks On Corporate Governance Systems In Chile

By Fernando Lefort & Eduardo Walker We present a synthesis of the major political and economic events that have influenced the development of laws and capital markets in Chile, and their impact on the evolution of Chilean conglomerates through time. We find that laws and regulations in Chile have been extremely «path dependent», corresponding in most cases to reactions to crises or major events, and argue that these events have persistently shaped corporate governance systems in Chile. We identify the...

February 4, 2017
Articles, Corporate Governance, Investing,
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04Feb

New Architectures in the Regulation and Supervision of Financial Markets and Institutions: The Netherlands

By Henriëtte Prast & Iman Van Lelyveld In recent years, several European Union member states have modified the institutional design offinancial supervision. These reforms pose the question which considerations have led to the different models chosen in these countries. We analyse the considerations in the Netherlands leading to the choice in 2002 of the twin -peaks model of financial supervision. The new model is based on the objectives of supervision. Thus, a separate authority is responsible for conduct-ofbusiness supervision, whereas...

February 4, 2017
Articles, Regulation, Supervision, ,
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04Feb

Rethinking the Financial Design of the World Bank

By Devesh Kapur & Arjun Raychaudhuri Since their inception, through 2012, the institutions comprising the World Bank group have been involved in lending nearly a trillion dollars. In this paper, we focus on the IBRD, which is the core of the World Bank. The IBRD has the potential to continue to grow and be an important player in official financial flows, supporting critical long-term development projects with large social returns, in sectors ranging from infrastructure, social sectors, or environment. The paper argues that this is...

February 4, 2017
Articles, Corporate Governance, Regulation
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04Feb

Tailored Aid for a Tailored Age?

By David Wheeler In this short essay, senior fellow David Wheeler compares the world’s foreign assistance architecture to how the rest of the world operates in the digital age. He suggests that multilateral and bilateral transactions from one behemoth to another (B2B) may be stuck in the past now that technology can and should create more person-to-person (P2P) foreign aid programs. The foreign assistance world, he argues, should learn from the worlds of business, entertainment, and interpersonal communications, which are fragmenting...

February 4, 2017
Aging, Articles
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04Feb

Changes in Funding Patterns by Latin American Banking Systems: How Large? How Risky? – Working Paper 420

By Liliana Rojas-Suarez & José María Serena This paper investigates the shifts in Latin American banks’ funding patterns in the post-global financial crisis period. To this end, we introduce a new measure of exposure of local banking systems to international debt markets that we term: International Debt Issuances by Locally Supervised Institutions. In contrast to well-known BIS measures, our new metric includes all entities that fall under the supervisory purview of the local authority. This is especially important in Latin...

February 4, 2017
Articles, Investing, ,
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04Feb

The Impact of Taxes and Social Spending on Inequality and Poverty in Latin America: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Peru, and Uruguay (Spanish) – Working Paper 427

By Nora Lustig Using standard fiscal incidence analysis, this paper estimates the impact of fiscal policy on inequality and poverty in thirteen countries in Latin America around 2010. Argentina, Brazil, Chile, Costa Rica and Uruguay are the countries which redistribute the most and El Salvador, Guatemala and Honduras redistribute the least. Contributory pensions are significantly equalizing in Argentina, Brazil and Uruguay and also in Chile, Costa Rica and Ecuador but, in the latter, their effect is small. In the rest...

February 4, 2017
Articles, Regulation,
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04Feb

What Enron Means for the Management and Control of the Modern Business Corporation: Some Initial Reflections

The Enron case challenges some of the core beliefs and practices that have underpinned various positions in the debates about corporate law and governance, including mergers and acquisitions, since the 1980s. In particular, Enron raises at least the following problems for the received model of corporate governance: First, it provides another set of reasons to question the strength of the efficient market hypothesis, here, the company's dizzyingly high stock price despite transparently irrational reliance on its auditors' compromised certification. Second, it...

February 4, 2017
Articles, Investing, Pension design, ,
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04Feb

Longevity Risk Management for Life and Variable Annuities: Effectiveness of Static Hedging Using Longevity Bonds and Derivatives

By Michael Sherris & Andrew Ngai For many years the longevity risk of individuals has been underestimated as survival probabilities improved across the developed world. The uncertainty and volatility of future longevity has posed significant risk issues for both individuals and product providers of annuities and pensions. This paper investigates the effectiveness of static hedging strategies for longevity risk management using longevity bonds and derivatives (q-forwards) for the retail products: life annuity, deferred life annuity, indexed life annuity and variable...

February 4, 2017
Articles, Investing, Pension design
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04Feb

Can International Capital Standards Strengthen Banks in Emerging Markets?

By Liliana Rojas-Suarez Who should determine banks’ capital standards: authorities or markets? What is the right definition of core capital: equity only or equity plus subordinated debt? Can the assessment of banks' individual credit risks by external rating agencies be of equal or better quality than the assessments derived from banks' own internal rating systems? These are some of the key financial regulatory issues currently being discussed by analysts in industrial countries, especially in the context of the proposed modification...

February 4, 2017
Adequacy, Articles, Investing
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