Interest rates in China comprise a mix of both market determined interest rates (interbank rates and bond yields), and regulated interest rates (lending and deposit rates), reflecting China's gradual process of interest rate liberalization. We argue, using a theoretical model and empirical...

It is shown how the frequency of central bank intervention in financial markets can affect the incentives for economic agents to acquire information, which will be reflected in market prices and thus become available to policy makers. The optimal frequency of intervention, and therefore the...

This paper discusses the transition strategy from administratively set interest rates to market rates. Despite worldwide trends toward financial liberalization, few monetary authorities are prepared to accept as reasonable any interest rate level that is market-determined. The paper suggests...

Nominal interest rate pegging leads to instability in an IS-LM model with a vertical long-run Phillips curve and backward-looking inflation expectations. However, it does not lead to instability in several large multicountry econometric models, apparently primarily because these models have...

In recent years, the appropriate level and structure of interest tates have come to be seen as major issues in connection with stabilization programs undertaken by members. These issues arise from consideration both on the demand side, as interest rates affect the magnitude of aggregate demand,...

This paper outlines a procedure for calculating the cash value of “menu items” in debt restructuring proposals, including par and non-par exchanges, with enhancements consisting of either interest or principal guarantees. It is argued that under certain plausible assumptions interest and...

Written by IMF's Legal Department, this book outlines the key issues involved in designing and implementing orderly and effective insolvency procedures, which play a critical role in fostering growth and competitiveness and may also assist in the prevention and resolution of financial crises....

This paper discusses findings of the joint IMF–World Bank Indonesia Financial Sector Assessment Program (FSAP) undertaken during 2009– 10. The assessment was conducted on processes and functions, as opposed to institutions and with the cooperation of the Bapepam-LK, the Bank Indonesia. It...

This technical note on financing of the private sector for Mexico describes the evolution, composition, and determinants of financing to the nonfinancial private sector in Mexico between 2000 and 2005. Equity issuance has not played an important role in financing the private sector in Mexico...