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21. Addressing Excessive Risk Taking in the Financial Sector: A Corporate Governance Approach

Author:
Steven L. Schwarcz and Maziar Peihani
Publication Date:
09-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
Excessive corporate risk taking by systemically important financial institutions (SIFIs) is widely seen as one of the primary causes of the global financial crisis. In response, an array of international reforms, under the auspices of the Group of Twenty’s (G20’s) standard-setting bodies, has been adopted to try to curb that risk taking. However, these reforms only impose substantive requirements, such as capital adequacy, and cannot by themselves prevent future systemic collapses. To complete the G20 financial reform agenda, SIFI managers should have a duty to society (a public governance duty) not to engage their firms in excessive risk taking that leads to systemic externalities. Regulating governance in this way can help supplement the ongoing regulatory reforms and reduce the likelihood of systemic harm to the public.
Topic:
Financial Crisis, Reform, Regulation, Risk, and Financial Institutions
Political Geography:
Global Focus

22. Electrification in Nigeria: Challenges and Way Forward

Author:
Chukwuka Onyekwena, Joseph Ishaku, and Precious Chukwuemelie Akanonu
Publication Date:
10-2017
Content Type:
Working Paper
Institution:
Centre for the Study of the Economies of Africa (CSEA)
Abstract:
Although electricity has been generated in commercial quantities in Nigeria for over a century, the rate of electricity infrastructure development in the county is low and power supply remains inadequate. Prior to reforms, the central challenges of the Nigerian power sector was the vertically integrated monopoly of government in power generation, transmission and distribution. While the reforms was successful in privatizing the generation and distribution segments of the Nigerian Electricity Supply Industry (NESI), the overbearing problems in the sector persists –with privatization only changing the dimensions of the challenges. Financing remain a major problem across all the segments of the NESI partly due to non-cost reflective tariff. Yet each segment of the NESI also faces its unique challenges. The generation segment is riffed with the problems of energy security and inefficiencies in other segments. The challenges in the transmission segment lies in the lack of modern transmission lines and equipment, gross mismanagement, poor maintenance of available infrastructure and inefficient grid design. Distribution companies face the problem of huge Aggregate Technical, Commercial, and Collection (ATC&C) losses.
Topic:
Economics, Privatization, Infrastructure, Finance, Electricity, Economic Development, Financial Institutions, and Financial Services
Political Geography:
Africa and Nigeria

23. Towards An Inflation Targeting Regime in Zambia

Author:
Caesar Cheelo and Thulani Banda
Publication Date:
06-2017
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
In this paper, I seek to discuss the conduct of monetary policy in an inflation targeting framework. The objective is to understand structural and institutional nuances in settings where this framework is successful in controlling inflation and challenges that emerge in the implementation of inflation targeting. I deal with the question: which institutional conditions should exist to support the successful implementation of inflation targeting in countries that use it? I find several institutional and legal elements which are common and can potentially explain much of the success in the implementation of inflation targeting among their monetary authorities. I benchmark these elements with the concepts of transparency and accountability of the central bank which are central tenets in the discussion of inflation targeting. I note that central bank credibility is a key outstanding element in explaining the success of inflation targeting. Components such as central bank independence and commitment to low stable inflation as the overriding objective of monetary policy represent critical preconditions for inflation targeting and can sustain the credibility of monetary policy.
Topic:
Monetary Policy, Inflation, Central Bank, Transparency, and Financial Institutions
Political Geography:
Africa and Zambia

24. Infrastructure Financing In Nigeria

Author:
Chukwuka Onyekwena, Precious Chukwuemelie Akanonu, and Anointing Ogie Momoh
Publication Date:
12-2016
Content Type:
Working Paper
Institution:
Centre for the Study of the Economies of Africa (CSEA)
Abstract:
Similar to most sub-Saharan African (SSA) countries, Nigeria has a huge infrastructure deficit which considerably limits efforts towards achieving inclusive growth, sustainable development, and poverty reduction. With infrastructure stock estimated at 20-25 per cent of Gross Domestic Product (GDP), Nigerias infrastructure stock is still significantly lower than the recommended international benchmark of 70 per cent of GDP. The 2014 National Integrated Infrastructure Master Plan (NIMP) estimates that a total of US$ 3 trillion of investments, or US$100 billion annually, is required over the next 30 years to bridge Nigerias infrastructure gap. In particular, the Plan estimates that Nigeria will have to spend an annual average of US$ 33 billion infrastructure investments for the period 2014 -2018. This means that Nigeria will have to more than double its spending on infrastructure from the current 2-3 per cent of GDP to around 7 per cent to make appreciable progress in infrastructure development over the next three decades.
Topic:
Economics, Infrastructure, GDP, Finance, Economic Growth, Economic Development, and Financial Institutions
Political Geography:
Africa, Nigeria, and Sub-Saharan Africa

25. Development Banks and Regional Powers: An Analytical Framework

Author:
Stefano Palestini
Publication Date:
11-2016
Content Type:
Working Paper
Institution:
The Kolleg-Forschergruppe (KFG)
Abstract:
Why do regional powers such as Brazil, South Africa, or Russia undertake different collective strategies to supply public goods in their regions of influence? When do those states prefer to delegate competences to existent multilateral financial institutions, such as regional development banks (RDBs), and when do they prefer to make use of their own national financial instruments? Why do those states create new RDBs that challenge the existing ones? The article builds and tests a set of hypotheses based on the interplay between capabilities and legitimacy to help answer these questions using contemporary South America as a case study. Through a process tracing analysis carried out for the period 2000–15, the article explains the different strategies undertaken by two states, Brazil and Venezuela, to supply infrastructure in the region, ranging from the use of the Brazilian National Development Bank to the creation of a new Bank of the South. It is suggested that the low capabilities and legitimacy expectations of both states explain the rising importance of external actors in the supply of regional public goods that we are currently witnessing in South America.
Topic:
Development, Regional Cooperation, Banks, Regionalism, and Financial Institutions
Political Geography:
Brazil, South America, Venezuela, and Global South

26. The Global Financial Crisis and Obstacles to U.S. Leadership

Author:
David Singer
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
MIT Center for International Studies
Abstract:
The regulatory environment in the U.S., however, is likely to change. The Treasury’s blueprint calls for the disman- tling of OTS, the enhancement of the Fed’s supervisory authority, and the creation of a national insurance regulator to replace the 50 separate regulators. Regulatory consolida- tion in the U.S. might be the most important catalyst for the creation of new international regulatory standards in banking. Consider the immense challenges of creating a global standard—which most likely cannot occur without U.S. support—when the agencies within the U.S. are at odds with one another! Ironically, U.S. investment banks themselves may have cleared one obstacle to international coopera- tion: the remaining free-standing securities firms (Goldman Sachs and Morgan Stanley) have opted to transform themselves into bank holding companies. This move reduces the SEC’s influence and gives the Fed a more uniform role in supervising financial institutions. Nevertheless, there is still consider- able fragmentation in the regulation of a range of activities that clearly have an important bearing on the stability of the banking system. If today’s financial crisis triggers the institutional consolidation of domestic financial regulation, then fruitful international negotiations will be more likely in the future. But until such consolidation occurs, the welter of U.S. regulatory agencies will face considerable obstacles in addressing the complicated inter- actions between banking, disintermediation, and capital markets that are at the root of today’s financial crisis. And the fragmentation of accountability among regulators and policymakers will continue to hamper U.S. leadership in preventing such a terrible crisis from happening again.
Topic:
Governance, Regulation, Financial Institutions, and Banking
Political Geography:
North America and United States of America

27. Building Better Institutions

Author:
Rodrigo de Rato
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It is a pleasure to be here today at the Cato Institute. I know that Cato believes in competition. Perhaps it is this spirit of competition that led you to schedule today’s conference to coincide with the International Monetary Fund’s research conference and steal the IMF’s managing director and its current and past directors of research as participants. But while you have missed out on our research conference you will not miss out on our research: my talk today is based to a large extent on the findings of our latest World Economic Outlook, which conveniently has the theme “Building Institutions” [IMF 2005a]. My remarks address three questions. First, what have we learned about the importance of institutions in promoting economic development? Second, how we can accelerate the transition to better institutions? And, third, what reforms of international organizations, the IMF in particular, are needed to help this transition?
Topic:
Economics, International Organization, Reform, Economic Development, and Financial Institutions
Political Geography:
Global Focus

28. Asian Economic Success and Latin American Failure in the 1980s: New Analyses and Future Policy Implications

Author:
Ajit Singh
Publication Date:
03-1994
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
A striking feature of the world economy during the last decade has been the collapse of economic growth in Latin America whilst industrialization and development have proceeded apace in the Asian countries. This paper first assesses alternative explanations of the Asian economic success and the Latin American failure during the 1980s. Secondly, it examines the related question of the long-term development strategies followed by the outstandingly successful East Asian economies. The paper arrives at rather different analyses and policy conclusions on these issues from those of the international financial institutions and the mainstream economists.
Topic:
Economic Growth, Economic Development, and Financial Institutions
Political Geography:
Asia and Latin America