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How to Strengthen the International Financial System by Restructuring Sovereign Balance Sheets

Author

Listed:
  • Ross P. Buckley

    (Tim Fischer Centre for Global Trade & Finance, Faculty of Law, Bond University)

  • Peter Dirou

    (Treasury Advisor, Ministry of Finance)

Abstract

The inability of developing nations to borrow in their own currency leads to currency mismatches on their national balance sheets. These mismatches render these economies vulnerable to external shocks and are a major source of damaging volatility for the entire international financial system. This article argues why these mismatches need to be remedied, and how the multilateral development banks and the Paris Club can take the lead in doing so.

Suggested Citation

  • Ross P. Buckley & Peter Dirou, 2006. "How to Strengthen the International Financial System by Restructuring Sovereign Balance Sheets," Annals of Economics and Finance, Society for AEF, vol. 7(2), pages 257-269, November.
    • Handle: RePEc:cuf:journl:y:2006:v:7:i:2:p:257-269
    as

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    References listed on IDEAS

    as
    1. John Williamson, 2005. "Curbing the Boom-Bust Cycle: Stabilizing Capital Flows to Emerging Markets," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa75, October.
    2. Morris Goldstein & Philip Turner, 2004. "Controlling Currency Mismatches in Emerging Markets," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 373, October.
    3. Barry Eichengreen & Ricardo Hausmann, 1999. "Exchange rates and financial fragility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 329-368.
    4. Pettis, Michael, 2001. "The Volatility Machine: Emerging Economies and the Threat of Financial Collapse," OUP Catalogue, Oxford University Press, number 9780195143300.
    5. Blair Comley & David Turvey, 2005. "Debt Management in a Low Debt Environment: The Australian Government's Debt Management Framework," Treasury Working Papers 2005-02, The Treasury, Australian Government, revised Feb 2005.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Jamel Boukhatem, 2009. "Essai sur les déterminants empiriques de développement des marchés obligataires," EconomiX Working Papers 2009-32, University of Paris Nanterre, EconomiX.
    2. Irena Jankovic & Bosko Zivkovic, 2014. "An Analysis Of The Effect Of Currency Mismatch On A Country’S Default Risk," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 59(201), pages 85-122, April – J.
    3. Jamel Boukhatem, 2009. "Essai sur les déterminants empiriques de développement des marchés obligataires," Working Papers hal-04140858, HAL.

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    More about this item

    Keywords

    International lending and debt problems; Sovereign balance sheet structure; Sovereign bond markets;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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