The case study on the U.S. Treasury Direct examines the evolution of the electronic distribution systems for marketable and nonmarketable government securities, the main objectives, and the basic legal infrastructure and the preconditions enabling the system. The U.S. experience highlights that...

Recent debate about the pro-cyclical effects of bank capital requirements, has ignored the important role that bank loan loss provisions play in the overall framework of minimum capital regulation. It is frequently observed that under-provisioning, due to inadequate assessment of expected credit...

Evidence about how choice of regulatory regimes affects the level of shareholder risk for the regulated company has traditionally focused on studies in the United Kingdom and the United States. Broad comparisons of price-cap based regimes (as practiced in the UK) with rate-of-return regulation...

The author presents evidence that balance sheet effects are critical determinants of both the likelihood of a crisis and of income losses following a crisis. She tests the validity of"insurance"and"liquidity"models of currency crisis. Both models predict that the occurrence of a balance of...

In any economic environment where decisions are decentralized, agents consider the risk that others might unfairly exploit informational asymmetries to their own disadvantage. Incomplete results, especially, lies at the heart of financial transactions in which agents trade real claims for...

The author analyzes the typical model for regulating investments in private pension funds. Pension reforms like those pioneered by Chile are being initiated or considered in Argentina, Bolivia, China, Colombia, Costa Rica, Hungary, Mexico, Peru, Uruguay, and elsewhere. Such reforms greatly...

Margin deposits, which serve as collateral to protect the clearinghouse, are typically the most important tool for risk management. The authors develop a model that explains how creating a futures clearinghouse may allow traders simultaneously to reduce both the risk of default and the total...

The authors analyze some aspects of the market for Brady bonds (restructured debt in developing countries). They focus on how the debt crisis in Mexico in 1994 affected risk assessment (as measured by the stripped spread) in other Brady countries, especially Poland. Their main finding: The risk...

Basis risk is the risk attributable to uncertain movements in the spread between yields associated with a particular financial instrument or class of instruments, and a reference interest rate over time. There are seven types of basis risk: Yields on 1) Long-term versus short-term financial...

The purpose of this study is to set out a practical method for analyzing how inflation, interest ceilings, reserve requirements and like impositions have had tax-like effects and how they can be compared with explicit taxes. Using this method estimates of the varying magnitudes of the total...