Emerging Market Securities Access to Global Plumbing

By Gongpil Choi, Federico Ortega, Manmohan Singh

March 26, 2021

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Format: Chicago

Gongpil Choi, Federico Ortega, and Manmohan Singh. Emerging Market Securities Access to Global Plumbing, (USA: International Monetary Fund, 2021) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

What are the constraints that have stalled EMs efforts to reuse their securities in international financial centers? We discuss the economics of collateral re-use and the present institutional structure in Asian and Latin American countries. Our empirical investigation suggests pledgeability enhances financial stability and reduces dollar funding risk. We also explain the Eurozone collateral pool to incentivize EMs, and why many securities (e.g., BTPs, Italy) are acceptable in London but not EM securities. Looking forward, EMs liaison with International Central Securities Depositories (ICSDs), and global banks’ balance sheet capacity to intermediate cross-border collateral will be crucial for this market to develop.

Subject: Collateral, Financial institutions, Financial markets, Financial sector policy and analysis, Financial sector stability, Financial statements, Public financial management (PFM), Securities, Securities markets

Keywords: Asia, Asia and Pacific, Caribbean, Collateral, Collateral market, Collateral markets, EM securities, Emerging market securities access, EMs effort, Europe, Eurozone, Finance market, Financial sector stability, Financial statements, Global, Global plumbing, Latin America, Securities, Securities markets

Publication Details

Pages:

37
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/094
Stock No:

WPIEA2021094
ISBN:

9781513574165
ISSN:

1018-5941

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