Risk Management of Sovereign Assets and Liabilities

Cassard, Marcel; Folkerts-Landau, David

doi:10.5089/9781451979619.001

Cited by 19 publications

(13 citation statements)

References 11 publications

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“…However, Wheeler (1997) stated that the government should act according to the risk preference of the middle voter who is more risk aversion. Cassard and Folkerts-Landau (1997) offered a more rational point of view which stated that the government should determine its risk tolerance level on top of the maximum interest rate cost and the unexpected fluctuation that debt portfolio can be bolstered without imperil the government"s intertemporal budget constraints and medium term goals.…”

Section: Review Of Studiesmentioning

confidence: 99%

Macroeconomics Determinants of Sovereign Credit Ratings

Chee¹,

Fah²,

Nassir³

2015

IBR

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The objective of this paper is to identify the determinants of sovereign credit rating. This study including 53 countries in the study covers from year 2000 to 2011. This study examines nine macroeconomic variables and extended by using three qualitative variables, i.e., history of default, economic development and economic freedom. The results are consistent with previous studies that some macroeconomics variables are determinants of rating. Furthermore, the economic freedom variable serves as a vital factor in determining sovereign credit rating that has been overlooked by the previous studies. This study has added new findings and indicates that the economic freedom of country is decisive factor in assessment.

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Section: Review Of Studiesmentioning

confidence: 99%

Macroeconomics Determinants of Sovereign Credit Ratings

Chee¹,

Fah²,

Nassir³

2015

IBR

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“…Such practices can appear as instances of depoliticized performativity in which municipalities subscribed to the disciplinary power of financialization. In other words, local authorities may have embraced the discourse of active debt management (Cassard & Folkerts-Landau, 1997) and entered derivatives markets as the latest financial innovation. However, local authorities do not appear to have embraced such a discourse, or at least, such motivations do not seem to be an important element of the story.…”

Section: A Key Accounting Device: the Upfrontmentioning

confidence: 99%

Italian municipalities and the politics of financial derivatives: Rethinking the Foucauldian perspective

Lagna

2015

Competition & Change

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This study examines the use of interest rate swaps by Italian municipalities during the 2000–2014 period. Through a constructive critique of Foucauldian political economy, it argues that local administrators did not enter the swaps market to perform and depoliticize the disciplinary power of financialized discourses. The evidence suggests many more layers of historical complexity underlie the municipalities’ actions than a Foucauldian approach can grasp. Local governments used swaps to circumvent the budget constraints imposed by the European Stability and Growth Pact. In this sense, municipalities acted more for political-strategic than for performative and depoliticized purposes. Rethinking the dimensions of performativity and disciplinary power – through an approach that is more sensitive than Foucauldian analysis to historical agency and asymmetrical power relations – is crucial to address the differential and politically shaped contours of financialization across the globe.

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“…Such an environment was established on the basis that 'private-sector-type structures or procedures [could have saved] some fractions of a per cent in debt costs' (Giovannini 1997: 45). Under this operational framework, the government began to act as a market actor that developed benchmark portfolios capturing the optimal trade-off between the costs and the risks of debt servicing (Cassard and Folkerts-Landau 1997). This new regime of public-debt governance imposed some degree of market rationality on the ruling parties and their dissipation of public expenditures.…”

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confidence: 99%

Derivatives and the financialisation of the Italian state

Lagna

2015

New Political Economy

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Abstract:The existing literature on financialisation has devoted insufficient attention to how governments wield the market-based practices and technologies of financial innovation to pursue statecraft objectives. Because of this inattention, scholars have missed the opportunity to examine a crucial facet of the financialisation of the state.To remedy this limitation, the present article investigates how and why the Italian government designed derivatives-based strategies during the 1993-99 period. It argues that these tactics gained momentum in the context of the political struggles that developed in Italy beginning in the late 1980s. In particular, the study shows how a neoliberal-reformist alliance came to power and used financial innovation to comply with the Economic and Monetary Union (EMU) admission criteria. EMU dynamics enhanced the power position of the neoliberal-reformist coalition vis-à-vis the country's traditional political and business establishment. This work offers insights that go beyond the specificities of the Italian case. It encourages further research on how governments in other countries simultaneously exposed state institutions to financial speculation and gained access to a range of new instruments through which they could manage state affairs in a financialised manner.

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Risk Management of Sovereign Assets and Liabilities

Abstract: This is a Working Paper and the author(s) would welcome any comments on the present text. Citations should refer to a Working Paper o/the International Monetary Fund. The views expressed are those of the author(s) and do not necessarily represent those of the Fund.

Cited by 19 publications

References 11 publications

Macroeconomics Determinants of Sovereign Credit Ratings

Macroeconomics Determinants of Sovereign Credit Ratings

Italian municipalities and the politics of financial derivatives: Rethinking the Foucauldian perspective

Derivatives and the financialisation of the Italian state

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