Publications /
Policy Paper

Back
Download PDF
Emerging Markets and Developing Economies in the Global Financial Safety Net
Authors
Otaviano Canuto
Amshika Amar
February 16, 2024
Related topics: 
Economy

When countries face external financial shocks, they must rely on financial buffers to counter such shocks. The global financial safety net is the set of institutions and arrangements that provide lines of defense for economies against such shocks.

From any individual country standpoint, there are three lines of defense in their external financial safety nets: international reserves, pooled resources (swap lines and plurilateral financing arrangements), and the International Monetary Fund.

We argue here that there is a need to extend and facilitate access to the ultimate global financial safety net layer: the IMF. We illustrate that by pointing out how Morocco and Mexico have boosted their defensive power by having access to IMF precautionary lines of credit.

*The authors wish to thank Abdelaaziz Ait Ali for comments on an earlier version, without implicating him in any way.

RELATED CONTENT

  • Tales of Emerging Markets
    Authors
    Otaviano Canuto
    Aleksandr V. Gevorkyan
    August 15, 2016
    Emerging market economies (EM) as a special class of financial assets have recently been subject to two competing tales. On the one hand, there is evidence of continued financial deepening and further integration within the global financial system, while the offer of higher yields remains hard to find elsewhere. On the other hand, there are frequent bouts of fear of systemic unwinding of positions triggered by investors “exiting” EM that exhibit signs of weak or unclear macroeconomi ...
  • Download PDF
    Mexico’s Strategic Comparative Advantage in International Trade: At the Crossroads of NAFTA, the Pacific Alliance, TPP, and TTIP
    Authors
    Luis de la Calle
    August 1, 2016
    This policy brief argues that Mexico’s future agenda of negotiations should include three main priorities. Firstly, with the help of its NAFTA partners, Mexico should position itself as the export platform of North America to the world. Its structural changes, web of agreements, and strategic location pave the way for this. Secondly, it should insist on being invited to the negotiating table of the Transatlantic Trade and Investment Partnership (TTIP). If full participation is not p ...
  • Oxford Economic Papers : Food price volatility and its consequences
    Authors
    Volume 69, Issue 3
    Introduction by Rabah Arezki
    Karim El Aynaoui
    Yaw Nyarko
    July 14, 2016
    OCP Policy Center and its partners, the International Monetary Fund (IMF), and the Center for Technology and Economic Development (CTED) at the New York University are pleased to announce the publication of a Special Issue on "Food Price Volatility and its Consequences" in Oxford Economic Papers. The papers selected in this special issue were first presented in February 2014 at an international conference organized in Rabat in collaboration with the IMF's Research Department and  t ...
  • Download PDF
    Housing Policies in Africa & Brazil: The role of PPPs for low-income housing
    Authors
    Marcus Vinicius de Freitas
    July 13, 2016
    Housing is part of the United Nations 11th Sustainable Development Goal, which is to “make cities inclusive, safe, resilient and sustainable”. One of the most important targets of such a goal is to “ensure access for all to adequate, safe and affordable housing1 and basic services and upgrade slums”. Since 2007, the world has faced rising inequality, insecurity and climate change impact. According to UN Habitat, 54% of the world´s population currently live in cities. By 2050, this n ...
  • China’s Spillovers on Latin America and the Caribbean
    Authors
    Otaviano Canuto
    July 11, 2016
    The Chinese economy is rebalancing while softening its growth pace. China’s spillovers on the global economy have operated through trade, commodity prices, and financial channels. The global reach of the effects from China’s transition have recently been illustrated in risk scenarios simulated for Latin American and the Caribbean economies.  The Chinese economy is rebalancing while softening its growth pace… The weight of the Chinese economy in the global economy rose on its way t ...
  • Download PDF
    Climbing the Global Digital Ladder: Latin America’s Inescapable Trial
    Authors
    Alfredo Da Gama e Abreu Valladão
    June 30, 2016
    Latin American economies are facing two historically defining challenges. First, how to cope with the end of the commodities “super-cycle” and the prospect of a long period of low prices for basic natural resources. After all, raw materials production and semi-industrialized goods encompass most of their comparative advantages. Second, and even more exacting, how to adjust to the present disruptive transition from an old to a new global economic and social model. The 20th century in ...
  • The Economic Implications of the Brexit Mess
    Authors
    Uri Dadush
    June 27, 2016
    The referendum in favor of the exit of Britain from the European Union (“Brexit”) marks a sad day for Britain and for Europe. It represents a victory of nationalism over the liberal economic order, in the country that inspired the ideas that lie at its foundations. The referendum probably signals the end of an experiment widely supported by the young, the elites and most economists, but which has failed in the eyes of the majority of British people. For Britain, the economic risks a ...