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Emerging Market Securities Access to Global Plumbing

Author

Listed:
  • Gongpil Choi
  • Federico Ortega
  • Mr. Manmohan Singh

Abstract

What are the constraints that have stalled EMs efforts to reuse their securities in international financial centers? We discuss the economics of collateral re-use and the present institutional structure in Asian and Latin American countries. Our empirical investigation suggests pledgeability enhances financial stability and reduces dollar funding risk. We also explain the Eurozone collateral pool to incentivize EMs, and why many securities (e.g., BTPs, Italy) are acceptable in London but not EM securities. Looking forward, EMs liaison with International Central Securities Depositories (ICSDs), and global banks’ balance sheet capacity to intermediate cross-border collateral will be crucial for this market to develop.

Suggested Citation

  • Gongpil Choi & Federico Ortega & Mr. Manmohan Singh, 2021. "Emerging Market Securities Access to Global Plumbing," IMF Working Papers 2021/094, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2021/094
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    Cited by:

    1. Giordano, Matteo & Goghie, Alexandru-Stefan, 2023. "From Policy to Regime: the changing posture of the ECB between liquidity and collateral through the lens of Monetary Regime," SocArXiv rw3ms, Center for Open Science.

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