Number of results to display per page
Search Results
1112. Why Bail-In Securities Are Fool's Gold
- Author:
- Avinash D. Persaud
- Publication Date:
- 11-2014
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Bailouts and bail-ins of failing financial institutions have been hotly disputed in the global financial crisis of the last five years. At the height of the crisis, several failing banks were bailed out with taxpayer money so they could service their debts, but as public outrage mounts, policymakers are increasingly looking at bailing in these institutions before using taxpayer funds. Bail-ins, also called haircuts, require the troubled institution's creditors to write off some of the debt or agree to a restructuring of the debt, which reduces their holdings. The public has demanded the imposition of these costs on creditors and bond - holders, arguing that if bad lending as well as bad borrowing went unpunished it would be encouraged. Additionally, the yawning fiscal deficits that have followed bailouts have led to unpopular fiscal retrenchment.
- Topic:
- Debt, Economics, Markets, Financial Crisis, and Reform
- Political Geography:
- United States
1113. Estimates of Fundamental Equilibrium Exchange Rates, November 2014
- Author:
- William R. Cline
- Publication Date:
- 11-2014
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This semiannual review finds that most of the major international currencies, including the US dollar, euro, Japanese yen, UK pound sterling, and Chinese renminbi, remain close to their fundamental equilibrium exchange rates (FEERs). The new estimates find this result despite numerous significant exchange rate movements associated with increased volatility in international financial markets at the beginning of the fourth quarter of 2014, and despite a major reduction in the price of oil. The principal cases of exchange rate misalignment continue to be the undervalued currencies of Singapore, Taiwan, and to a lesser extent Sweden and Switzerland, and the overvalued currencies of Turkey, New Zealand, South Africa, and to a lesser extent Australia and Brazil. Even so, the medium-term current account deficit for the United States is already at the outer limit in the FEERs methodology (3 percent of GDP), and if the combination of intensified quantitative easing in Japan and the euro area with the end to quantitative easing in the United States were to cause sizable further appreciation of the dollar, an excessive US imbalance could begin to emerge.
- Topic:
- Economics, Foreign Exchange, International Trade and Finance, and Monetary Policy
- Political Geography:
- Africa, United States, Japan, Turkey, South Africa, Brazil, and New Zealand
1114. A Call to the Conference of the New England Governors and Eastern Canada Premiers for Bilateral Energy Governance
- Author:
- Andrew Adams, Lyne Maheu, and Kieran McDougal
- Publication Date:
- 11-2014
- Content Type:
- Policy Brief
- Institution:
- Centre for International Governance Innovation
- Abstract:
- The Northern Pass Transmission Project is mired in political deadlock due to conflict over its potential impacts and current assessment process. Although the proposal has little political support within New Hampshire, the US Department of Energy (DOE's) assessment process is moving forward. New England has become increasingly dependent on natural gas for power generation, which has dramatically risen in price recently, and the Northern Pass presents an opportunity to diversify the region's electrical supply. However, as the project stands, New Hampshire bears a majority of the economic, social and ecological costs, while receiving little of the regional benefit of affordable, flexible and reliable energy. There may be similar alternatives to the Northern Pass that secure the regional benefits of energy security and reliability while also reducing local costs. Without comparing the Northern Pass against alternative infrastructure projects, policy makers cannot assess which project generates the most net benefits. This policy brief contrasts the local and regional impacts of the Northern Pass, in order to shed light on the deficiencies that arise when analysing energy infrastructure projects in isolation.
- Topic:
- Economics, Energy Policy, Politics, and Infrastructure
- Political Geography:
- Canada and England
1115. Let Bygones Be Bygones: The Case for India's Inclusion in APEC
- Author:
- Kevin Carmichael
- Publication Date:
- 11-2014
- Content Type:
- Policy Brief
- Institution:
- Centre for International Governance Innovation
- Abstract:
- Canadian Prime Minister Stephen Harper will miss the 2014 Beijing APEC summit. His former spokesman says it does not matter. "[I]t's safe to say that Canada won't lose out by skipping this particular summit, at this particular time, for this particular reason," Andrew McDougall (2014) wrote in an opinion article posted on the Canadian Broadcasting Corporation's (CBC's) website on November. In early October, a US State Department official told an audience in Washington, DC that Beijing was shaping up to be a "good" summit, in part because US President Barack Obama was planning to attend after missing the previous two APEC leaders' meetings (Wang 2014).
- Topic:
- Economics and Regional Cooperation
- Political Geography:
- United States, India, and Asia
1116. Ukraine: Stress at the IMF
- Author:
- Susan Schadler
- Publication Date:
- 10-2014
- Content Type:
- Policy Brief
- Institution:
- Centre for International Governance Innovation
- Abstract:
- In April 2014, in a departure from its normal aversion to lending to countries in conflict, the International Monetary Fund (IMF) approved a US$17 billion loan to Ukraine to be disbursed over two years. At the time, Ukraine was three weeks away from a presidential election; engaged in combat with an armed separatist movement backed by Russia, its largest trading partner and supplier of energy; and experiencing a significant drain in foreign exchange reserves and bank deposits along with soaring yields on sovereign debt. The country was also reaping the returns of decades of economic mismanagement. Dire from both political and economic perspectives, the situation had the markings of a case where the IMF has the expertise to be usefully engaged, but there were also red flags demarcating circumstances that can hobble the IMF's effectiveness.
- Topic:
- Economics, International Monetary Fund, and Foreign Aid
- Political Geography:
- Europe and Ukraine
1117. The 2014 Survey of Progress in International Economic Governance
- Author:
- Domenico Lombardi, Barry Carin, and David Kempthorne
- Publication Date:
- 11-2014
- Content Type:
- Policy Brief
- Institution:
- Centre for International Governance Innovation
- Abstract:
- The annual CIGI Survey of Progress in International Economic Governance assesses progress in four dimensions of international economic governance: macroeconomic and financial cooperation; cooperation on financial regulation; cooperation on trade; and cooperation on climate change. Governance related to these dimensions is scored on the following progress scale: 0%-19% represents "major regression"; 20%-39% represents "some regression"; 40%-59% indicates "minimal progress"; 60%-79% characterizes progress; and 80%-100% represents "major progress." Recognizing the difficulty of making objective judgments given the complexity of the issues, the results are offered as a range of subjective opinions from CIGI experts with diverse backgrounds.
- Topic:
- Climate Change, Economics, International Cooperation, International Trade and Finance, and Governance
- Political Geography:
- United States and Europe
1118. China in the G20 Summitry: Review and Decision-making Process
- Author:
- Alex He
- Publication Date:
- 10-2014
- Content Type:
- Working Paper
- Institution:
- Centre for International Governance Innovation
- Abstract:
- As the largest emerging economy, China believes that the Group of Twenty (G20), instead of the Group of Eight (G8), is the ideal platform for its participation in global governance. This paper examines the reasons why China joined the G20 rather than the G8, and then focuses on a detailed review of China's participation in G20 summits since the enhanced forum began in 2008. China took a very active and cooperative attitude in dealing with the global financial crisis in 2008-2009. The paper observes that China also insisted on its own agenda for reforms to the international monetary system, through reforms to the international financial institutions that manage it — in particular, raising the number of voting shares and the representation of developing countries at the IMF and the World Bank. Based on the reviews of China's performance in the G20 summits since 2008, the paper explores China's policy making through its participation in the G20, determining that it is shaped by several major economic departments in addition to the Ministry of Foreign Affairs, and coordinated by a vice premier responsible for economic and financial affairs. The paper concludes that China has gained immensely from its participation in the G20. Most importantly, China entered the centre stage of global economic governance through the G20, which allowed the country to demonstrate that it is a responsible great power, and communicate and maintain relations with other major powers. The main challenges China has faced since joining the G20, from the perspective of some Chinese scholars, are a lack of capacity for agenda setting and shaping initiatives, as well as inadequate communication and coordination among different government departments and between the Sherpa and financial tracks of the G20.
- Topic:
- Economics, International Political Economy, International Trade and Finance, International Monetary Fund, Global Recession, Financial Crisis, and World Bank
- Political Geography:
- China
1119. The Effect of Index Futures Trading on Volatility: Three Markets for Chinese Stocks
- Author:
- Pierre Siklos, Martin T. Bohl, and Jeanne Diesteldorf
- Publication Date:
- 09-2014
- Content Type:
- Policy Brief
- Institution:
- Centre for International Governance Innovation
- Abstract:
- This paper examines whether the introduction of Chinese stock index futures had an impact on the volatility of the underlying spot market. To this end, we estimate several Generalized Auto-Regressive Conditional Heteroscedasticity (GARCH) models and compare our findings for mainland China with Chinese index futures traded in Singapore and Hong Kong. Our results indicate that Chinese index futures decrease spot market volatility with all three spot markets considered. In contrast, we do not obtain the same results for the companion index futures markets in Hong Kong and Singapore. China's stock market is relatively young and largely dominated by private retail investors. Nevertheless, our evidence is favourable to the stabilization hypothesis usually confirmed in mature markets.
- Topic:
- Economics, International Trade and Finance, and Markets
- Political Geography:
- China and Singapore
1120. The Role of International Trade in the Rise of the New Zealand Dairy Industry from Its Beginnings to the Fonterra Era
- Author:
- Bruce Muirhead
- Publication Date:
- 08-2014
- Content Type:
- Working Paper
- Institution:
- Centre for International Governance Innovation
- Abstract:
- Since its widespread settlement by Europeans in the 1840s, New Zealand (NZ) has been an agricultural economy. As has been pointed out “there [has been] no serious challenge to the fundamental precept that the country's economy rested on an agricultural foundation” (Macdonald and Thomson 1987, 231), and dairy has been a significant focus of that base. Dairy production was introduced to New Zealand with the clear intent to establish New Zealand as an adjunct to the economic needs of Britain (Hawke 1985). Indeed, the closeness of the relationship between “the Britain of the south” and the metropolitan centre is one of the fundamental characteristics of any environmental history of NZ agriculture (Pawson 2008). This would persist in a material sense for more than a century, until the United Kingdom joined the European Community (EC) in 1973.
- Topic:
- Economics and Food
- Political Geography:
- Britain, United Kingdom, Europe, and New Zealand