How to Strengthen the International Financial System By Restructuring Sovereign Balance Sheets
Annals of Economics and Finance, Vol. 2, pp. 257-269, 2006
19 Pages Posted: 30 Jul 2007
The inability of developing nations to borrow in their own currency leads to currency mismatches on their national balance sheets. These mismatches render these economies vulnerable to external shocks and are a major source of damaging volatility for the entire international financial system. This article argues why these mismatches need to be remedied, and how the multilateral development banks and the Paris Club can take the lead in doing so.
Keywords: International Lending and Debt Problems, Sovereign Balance Sheet Structure, Sovereign Bond Markets
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