The document discusses how Mongolia's financial system is interconnected with the global system and affected by global financial crises and developments. It provides a brief history of the international financial system, from the gold standard to the present system of institutions like the IMF. It then outlines some past global financial crises in the 1990s and 2008. It describes Mongolia's banking system, capital markets, and risks from its dependence on commodities exports. Finally, it examines how global monetary flows, foreign reserves, interest rates, and fiscal policy transmission mechanisms impact Mongolia's economy and financial vulnerabilities.
Key Takeaways:
- Macro-financial risks
- Soundness and resilience of financial institutions
- Network of the financial system and contagion analysis
- Regulatory initiatives
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
This is a presentation on Worldwide Financial Crisis made by Vinod Thomas, Director-General & Senior Vice President at the Independent Evaluation Group, World Bank. In the presentation, Mr. Thomas describes the reasons for the recent financial crisis, highlights the extent of damages, and discusses policy responses to the crisis.
OBJECTIVE
The Reserve Bank of India on 27th December 2019 released the 20th issue of the Financial Stability Report (FSR). The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, as also the resilience of the financial system. The Report also discusses issues relating to development and regulation of the financial sector. In this Webinar, we shall understand the key findings and observations made in the Report.
Key Takeaways:
- Macro-financial risks
- Soundness and resilience of financial institutions
- Network of the financial system and contagion analysis
- Regulatory initiatives
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
This is a presentation on Worldwide Financial Crisis made by Vinod Thomas, Director-General & Senior Vice President at the Independent Evaluation Group, World Bank. In the presentation, Mr. Thomas describes the reasons for the recent financial crisis, highlights the extent of damages, and discusses policy responses to the crisis.
OBJECTIVE
The Reserve Bank of India on 27th December 2019 released the 20th issue of the Financial Stability Report (FSR). The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, as also the resilience of the financial system. The Report also discusses issues relating to development and regulation of the financial sector. In this Webinar, we shall understand the key findings and observations made in the Report.
Regional Economic Outlook: Middle East and Central AsiaIMF
The May 2010 Regional Economic Outlook: Middle East and Central Asia reports on the implications for the region of global economic developments and presents key policy challenges and recommendations. A resumption of capital inflows and the rebound in crude oil prices have aided the recovery in the oil-exporting countries of the Middle East and North Africa. The group of oil-importing countries is expected to show marginal increase in growth in response to a pickup in trade, investment, and bank credit. A key challenge for these countries is to enhance competitiveness to raise growth rates and generate employment. In the Caucasus and Central Asia, exports have begun to pick up, the decline in remittances appears to be slowing or reversing, and capital inflows have turned positive. For 2010, a recovery across the region is projected as the global economy, and in particular Russia, picks up speed. Overall, prospects for the region are improving and the regional impact of the Dubai crisis and events in Greece has been limited so far. Nevertheless, a repricing of sovereign debt cannot be excluded, adding a degree of uncertainty to the outlook.
The Least Developed Countries Report 2011 puts forward a policy framework for enhancing the development impact of South–South cooperation, and proposes ways to leverage South–South financial cooperation for development in the LDCs.
This paper investigates the barriers to innovation perceived by Polish manufacturing firms. It refers to the heterogeneity of innovation active firms. We introduce a taxonomy of innovative firms based on the frequency with which they introduce commercialised innovations using data from both CIS4 (for 2002-2004) and CIS5 (2004-2006). Two groups of innovation-active firms are distinguished: those which introduced innovation in both periods covered by both CIS (which we call persistent innovators) and those which introduced innovation either in CIS4 or CIS5 (which we call occasional innovators). We use a four step analysis covering binary correlations, Principal Component Analysis, probit model and correlations of disturbances. Two types of explanatory variables describing firms’ characteristics and innovation inputs used are considered. The paper shows that there are considerable differences in sensitivities to the perception of innovation barriers and in complementarities among barriers between persistent and occasional innovators. In the case of occasional innovators, a kind of innovation barrier chain is observed. This has an impact on differences in the frequency of innovation activities between the two groups of innovators and results in a diversification of innovators.
Authored by: Ewa Balcerowicz, Marek Pęczkowski, Anna Wziatek-Kubiak
Published in 2011
Western governments are hopelessly addicted to deficit financing while refusing to address looming funding issues - with apologies to the embarrassingly foolish Angela Merkel, politicians can no more successfully “battle” the markets than you and I can successfully “battle” gravity. Petrocapita is an investment trust built around the premise that demand for energy will continue to move prices higher over the long-term. Petrocapita was created to allow investors to add professionally managed oil & gas assets directly to their portfolios.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
Regional Economic Outlook: Middle East and Central AsiaIMF
The May 2010 Regional Economic Outlook: Middle East and Central Asia reports on the implications for the region of global economic developments and presents key policy challenges and recommendations. A resumption of capital inflows and the rebound in crude oil prices have aided the recovery in the oil-exporting countries of the Middle East and North Africa. The group of oil-importing countries is expected to show marginal increase in growth in response to a pickup in trade, investment, and bank credit. A key challenge for these countries is to enhance competitiveness to raise growth rates and generate employment. In the Caucasus and Central Asia, exports have begun to pick up, the decline in remittances appears to be slowing or reversing, and capital inflows have turned positive. For 2010, a recovery across the region is projected as the global economy, and in particular Russia, picks up speed. Overall, prospects for the region are improving and the regional impact of the Dubai crisis and events in Greece has been limited so far. Nevertheless, a repricing of sovereign debt cannot be excluded, adding a degree of uncertainty to the outlook.
The Least Developed Countries Report 2011 puts forward a policy framework for enhancing the development impact of South–South cooperation, and proposes ways to leverage South–South financial cooperation for development in the LDCs.
This paper investigates the barriers to innovation perceived by Polish manufacturing firms. It refers to the heterogeneity of innovation active firms. We introduce a taxonomy of innovative firms based on the frequency with which they introduce commercialised innovations using data from both CIS4 (for 2002-2004) and CIS5 (2004-2006). Two groups of innovation-active firms are distinguished: those which introduced innovation in both periods covered by both CIS (which we call persistent innovators) and those which introduced innovation either in CIS4 or CIS5 (which we call occasional innovators). We use a four step analysis covering binary correlations, Principal Component Analysis, probit model and correlations of disturbances. Two types of explanatory variables describing firms’ characteristics and innovation inputs used are considered. The paper shows that there are considerable differences in sensitivities to the perception of innovation barriers and in complementarities among barriers between persistent and occasional innovators. In the case of occasional innovators, a kind of innovation barrier chain is observed. This has an impact on differences in the frequency of innovation activities between the two groups of innovators and results in a diversification of innovators.
Authored by: Ewa Balcerowicz, Marek Pęczkowski, Anna Wziatek-Kubiak
Published in 2011
Western governments are hopelessly addicted to deficit financing while refusing to address looming funding issues - with apologies to the embarrassingly foolish Angela Merkel, politicians can no more successfully “battle” the markets than you and I can successfully “battle” gravity. Petrocapita is an investment trust built around the premise that demand for energy will continue to move prices higher over the long-term. Petrocapita was created to allow investors to add professionally managed oil & gas assets directly to their portfolios.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
How to use the Chinese mobile app 'Wechat', known as 'Weixin' in China to promote a brand.
Best practices, tools and tips for effective B2B and B2C commmunication to Chinese consumers.
Published by FOCUS magazine, China-Britain Business.
Feb 2014 Issue, p.12-13
D&B's Global Outlook report outlines regional growth and projections, key risks and recommendations for North America and Mexico, Latin America, Europe, Central Asia, Asia Pacific, Middle East and North Africa, and Sub-Saharan Africa.
Moez Labidi - Professor of Economics at the University of Monastir in Tunisia
In this presentation, Moez Labidi, Professor of Economics at the University of Monastir in Tunisia, discusses the current challenges of the democratic transition in Tunisia.
GDN-AUB Panel Discussion on "The road to democracy: The Arab region, Latin America and Eastern Europe".
Beirut, Lebanon
May 18th, 2012.
Capital flows management in emerging countries: Some lessons from the recent ...Mahmoud Sami Nabi
- International capital flows and economic development
- Rationale for the capital flows management (CFM)
- Impacts of the COVID-19 crisis on capital flows in emerging countries
- Some lessons from the CFM during the COVID-19 crisis
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
Impact Investing & Solvency 2 personal proposalJérôme BOUILLON
Personal proposition presented to the EU commission in the context of the Social Business act. The goal is to foster Impact investing investment by Institutional Investors
Breakfast with Matt Slaughter - The Global Economic Outlook: What's Next?tuckalumni
The Global Economic Outlook: What's Next?
Here in mid-2012, the global economy continues to expand but also to face significant risks. In Europe, the financial crisis of many banks and sovereigns has worsened in recent months. In the United States, growth in employment and output remain slow—and several difficult fiscal choices await the end of the year. Many BRIC-and-beyond countries continue to grow fast—but in China and India, most notably, growth has slowed the past year. This inaugural “Breakfast with Matt” will examine some of the main factors in the global economic outlook.
About Matthew Slaughter
Associate Dean for the MBA Program; Signal Companies Professor of Management
In addition to academic scholarship, Dean Slaughter writes general-interest items for the business and policy communities. Slaughter has also given speeches to and testified before both chambers of the U.S. Congress. His work and ideas have been widely featured in business media.
Latin America Risks And Opportunities - Jan 2012ibarraricardo
Key risks and opportunities in Latin America for 2012. This will include an overview of our global and regional views as well as our strategy for Financial Markets in Latin American & the Caribbean.
2. Outline
I. The International Financial System
II. Global Financial Crises
III. Mongolian Financial System
IV. How the International System Affects Mongolia
V. What Can Mongolia Do to Protect Itself from the Boom
and Bust Cycles of Commodity Exporting Countries?
Main message: Mongolia is now more than ever interlinked
with the global financial developments
3. I. THE INTERNATIONAL FINANCIAL SYSTEM
• System depends on structure, structure
depends on its parts, and how it all works
• Structure and parts: Banks, capital
markets, international multilateral
institutions, regulatory framework, why?
• Financial markets are different, because of
systemic problems
4. History of the International Financial System
• The Gold Standard (1876-1914)
• Gold has served as a medium of exchange since the early
B.C. days of Greeks and Romans
• In late 19th century, there arose a need for a more formalized
system for settling trade balances
• Under this standard:
• Each country set the rate at which its currency could be converted
to a weight of gold ($20.67/ounce in the US, £4.2474/ounce in
GB)
• Central banks could not issue more currency than its gold
reserves
• Worked until the WWII interrupted trade flows
5. History of the International Financial System
• War years (1914-1944)
• WWI began, need for government spending increased (to
pay for the war), printed large amounts of currency
• Many of the trading currencies lost their convertibility into
other currencies. USD was the only currency that continued
to be convertible.
6. History of the International Financial System
• The Bretton Woods System (1944-1971)
• As the WWII drew to a close in 1944, the Allied Powers (the
anti-German coalition consisted of 44 nations) met in Bretton
Woods, New Hampshire to create a new system.
• Established a USD-based international monetary system:
• USD was the only currency converted into gold ($35/ounce).
• Other currencies were exchangeable at a fixed rate against the
dollar.
• Also established two institutions: the IMF and the World Bank
7. History of the International Financial System
• Collapse of the Bretton Woods (1971)
• Inflation in the US
BOP deficits in the US
BOP surpluses around the world
forcing inflation upon other countries
not effective anymore
• Break of the link between value of currency and gold
• Risks of printing money
8. Present System
• Institutions:
Governments
Multilateral
Central Banks IMF
Development Banks
Private Institutions
(private capital flows)
9. The Balance of Payments (BOP)
• Monitors how much money is going in and out of a
country during a specific period of time
• Affects important factors of the economy such as the
exchange rate, interest rates, inflation, and the GDP
• 3 accounts:
• Current Account(trade)
• Capital and Financial Account (investments)
• Foreign reserves
• Surplus: money in>money out
• (ex: KFA surplus: foreign investments>domestic investments in
foreign country)
• Deficit: money out>money in
• (ex: CA deficit: imports>exports)
10. II. GLOBAL FINANCIAL CRISES
1. Crises of the 1990’s
• Mexican Peso Crisis (1994)
• The Asian Financial Crises (1997-98)
• Russia and Brazil (1998-99)
Similar characteristics:
Market liberalization/deregulation
Capital mobility
Speculative attacks
Insufficient reserves
Devaluation of the currency
Stock markets crashing
11. II. GLOBAL FINANCIAL CRISES
2. Crisis of 2008, but it has not over
• The financial crisis of 2007–2008, also known as the
Global financial Crisis and 2008 financial crisis, is
considered by many economists to be the worst financial
crisis since the Great Depression of the 1930s.
•This time originated in the developed markets, Bear
Sterns, Lehman Brothers collapse affecting the world
12.
13. II. GLOBAL FINANCIAL CRISES
3. The Euro Debt Crisis (now)
• Eurozone countries losing control of their
finances and become unable to repay their
government debts
• Greece was the first to take a multi-billion pound
bailout from other European countries last
May, followed by Portugal and Ireland.
• The ―contagion effect‖—one country’s financial
problem spilling over to another country.
14. III. MONGOLIAN FINANCIAL SYSTEM
• Banking Sector
• Bank dominated about 95% of the total financial system assets
• 14 commercial banks
• Banks are exposed to credit and market risks
15. III. MONGOLIAN FINANCIAL SYSTEM
• Capital Markets
• markets are small but financial flows affect
the exchange rate
• Market capitalization 2.2 trillion MNT as of
2011 (about 20% of the GDP)
• limitations in terms of legal
framework, infrastructure, and liquidity
• because MSE is underdeveloped, companies
seek funding from overseas markets
16. III. MONGOLIAN FINANCIAL SYSTEM
• Correlation of commodities and government finances
• Government finances dependent on commodity exports
• First it was Erdenet, now from coal, soon from copper exports from
OT
• Decline in exports negatively impacting government finances
17. Risks: banks, inflation
• Vulnerability in the banking system
• Highly dollarized (more than 1/3 of bank loans and bank deposits
are denominated in USD)
• High non-performing loans (NPLs)
• Risk management weak
• High inflation
• reached 16.7% in April (y.o.y), 14.8% in September (still above the
BoM’s target of a single-digit inflation)
18. Risks: fiscal deficit
• Increasing
government deficit
expenditures
increased 25.6%
percentage points
more than the
revenues (y.o.y)
Source: National Statistical Office, September 2012
19. Risks: Fiscal deficit
Mongolia’s fiscal deficit
rose to 4.2% of the
GDP in April 2012
although the
government revenue
growth was the highest.
Source: The World Bank, Mongolia Quarterly Update, June 2012
20. Risks: Export growth
• Export growth
negative for the
first time in April
• Further
sluggishness
likely
Source: The World Bank, Mongolia Quarterly Update, June 2012
21. Risks: Trade deficit
• Widening trade
deficit
$2.1bn in March
2012, up from
$0.7bn in 2011
Source: The World Bank, Mongolia Quarterly Update, June 2012
22. • Risks: CA deficit 35% of GDP in March 2012 (was 18% in 2011)
Source: The World Bank, Mongolia Quarterly Update, June 2012
23. Risks: Exchange rate
• Depreciation of the MNT
Nominal and
Real Exchange
Rates
Source: The World Bank, Mongolia Quarterly Update, June 2012
24. IV. HOW THE INTERNATIONAL
SYSTEM AFFECTS MONGOLIA
The Transmission Mechanisms
1. International Monetary Flows, monetary base
increases/decreases
• Inflation
• Demand side pressures
government spending
• Supply side pressures
MNT depreciation imports more expensive
Supply-food shortages
26. The Transmission Mechanisms
3.Monetary base, money supply
• Interest Rate Differentials
• also affects the transmission system
E.g. flows of Korean funds during the 2008-2009 crisis
• Real interest rates important for people who live in the
country
• With inflation accelerating, real deposit and lending rates
falling.
27. Real deposit rate now negative (-6.7%)
Real lending rate barely positive (0.6%)
Source: The World Bank, Mongolia Quarterly Update, June 2012
28. The Transmission Mechanisms
• Monetary Policy
• Expansionary versus contractionary (tightening)
• BoM tightened the policy by raising the benchmark rate to
13.25% and the banking sector reserve requirement ratio to
11%
29. The Transmission Mechanisms
• Fiscal Space still constrained
• Rising fiscal deficit more vulnerability when there are
global economic uncertainties
• ―boom-and-bust‖ cycle
• Brings into focus the need to manage resource curse issues
30. The Transmission Mechanisms: Rising
Expectations
• Off-Budget Financing
• government borrowing, that should be invested in productive
assets to be repaid later
• The Development Bank of Mongolia issued 5-year $580mn
worth of foreign currency bond offering in March 2012
• Debt issued by the DBM is of relatively short term raising
exposure to external shocks or to unexpected delays in
mining projects that effect commodity revenues (there is still
uncertainty in the global financial system)
31. V. WHAT CAN MONGOLIA DO TO
PROTECT ITSELF FROM BOOM-BUST
CYCLES?
• Fiscal Stability
• Fiscal Stability Law becoming effective in January 2013
(Structural deficit ceiling of 2% of GDP)
• Need to make sure that the lending of the DBM is within the
framework of the FSL
• Look at other countries and how they have managed mineral
rich economies
32. Structural deficit
6.1% of GDP as
of April, 2012—
Source: The World Bank, Mongolia Quarterly Update, June 2012
33. Chile’s example—
• Chile
• Chile produces about 1/3 of world’s copper Structural balance
• Copper exports55% if its export means the
difference between
• Copper revenues18% of fiscal revenues trend revenues
• Adopted Structural Balance Rule and public
expenditures
Objectives:
1. to protect public spending from the effects of changes in
commodity prices
2. to improve government’s net asset position to meet contingent
obligations
34. Chile’s example
• Chile’s Fiscal Rule
Fiscal Responsibility Law:
• Each administration must announce structural balance target
within 90 days of taking office
• Sovereign wealth funds:
• Pension Reserve Fund
helps cover pension guarantees
• Economic and Social Stabilization Fund
receives budget surplus after payments (fiscal buffer)
Resource of the two funds are invested abroad
35. Chile’s example
• Chile’s Fiscal Rule
• Transparency of the rule
• Independent expert committees set up the main parameters of the
rule, therefore protected from political interference
• Well understood by both public and market participants
• Detailed explanations, implementation reviews, targets, all published
• Methodological improvements over time
• To incorporate changes in other sources of fiscal revenue
36. V. WHAT CAN MONGOLIA DO TO
PROTECT ITSELF FROM THEBOOM-
BUST CRISIS?
• Recognize interdependency of Mongolia on global
flows, factors
• Managing Inflation
• Managing Expectations—fiscal side; Chilean example
• Policy Certainty—credibility—foreign investment
37. V. WHAT CAN MONGOLIA DO TO
PROTECT ITSELF FROM THE CRISES?
• Monetary side
Sterilization of the financial flows
• Central bank can sterilize capital inflows
• Otherwise currency appreciation and inflation
• METHODS:
• Domestic component of monetary base (bank
reserves and currency) is reduced
• Encourage private investment overseas
• Conduct Open Market Operations of central bank –
selling more of treasury bills, reduce monetary base
• Widen band of exchange rate movements
38. V. WHAT CAN MONGOLIA DO TO
PROTECT ITSELF FROM THE CRISES?
• Funds: saving for a rainy day? Chilean example and other
countries
• Human development fund
• Stabilization fund
• Managing these funds are the issue, how much is still saved
for difficult times?
39. V. WHAT CAN MONGOLIA DO TO PROTECT
ITSELF FROM THE BOOM-BUST CRISES?
• Minimize off-budget financing
• Although about 40% of the funds raised by the DBM is to
finance important mining related infrastructure, the remainder
is to be used for projects that will not generate much revenue
(undermine the goals of the FSL)
40. Recent Headlines…
“”Tax proposals in Mongolia threatens Rio Tinto project”
New York Times
“Mongolia's white-hot growth slows on China woes”
AFP
“…the advice to Mongolian policy makers is to „hold your
horses‟ and adopt a more cautious macroeconomic stance”
The World Bank
“Mongolia: can‟t live with China, can‟t live without China”
Financial Times
“Mongolia‟s new investment law: deterrent or clarification?”
Financial Times
41. MAIN MESSAGE
Mongolia is now more than ever interlinked with the global
financial developments
It is even more important to be able to manage complex
financial developments
42. Activity…
What would you do if you were…
• Central bank governor
• Ministry of Finance, Minister of Finance
• Member of the Parliament
• in managing the ―boom-bust‖ crises
• Private investors of large global companies
• What impacts above government actions have on private investments