Most central banks oblige depository institutions to hold minimum reserves against their liabilities, predominantly in the form of balances at the central bank. The role of these reserve requirements has evolved significantly over time. The overlay of changing purposes and practices has the result that it is not always fully clear what the current purpose of reserve requirements is, and this necessarily complicates thinking about how a reserve regime should be structured. This paper describes three main purposes for reserve requirements-prudential, monetary control and liquidity management-and suggests best practice for the structure of a reserves regime. Finally, the paper illustrates current practices using a 2010 IMF survey of 121 central banks.
Since the late 1990s' Asian crisis, ASEAN‐5 countries have expended considerable effort in developing their bond markets. However, the size of these markets relative to GDP has hardly changed. Can we explain this? And does it mean that domestic markets have not, in fact, developed? The article argues that bond market growth has been held back by a sharp fall in business investment, which has left firms with little need for bond borrowing. Even so, markets have developed in other ways, to such an extent that substantial amounts of foreign portfolio investment have begun to flow into ASEAN‐5 bonds. These developments have important ramifications. With the investor base growing and infrastructure investment likely to rise, ASEAN‐5 bond markets could expand rapidly, holding out the prospect that the region could finally achieve ‘twin engine’ financial systems in the near future.
" Bremer began his talk with a pledge to confront the looters, saboteurs and street criminals that plagued Iraq after the war. Bremer also noted that a governing council of Iraqis would soon be established to help manage the country. But most of Bremer's speech focused on what he called his "third and most immediate priority," rebuilding the economy.Bremer described a state where more than 60 percent of the population depended on government food rations to survive. After achieving middle-income status in the late 1970s, Iraq's economy imploded during its war with Iran in the 1980s and the UN sanctions that followed the Persian Gulf War in 1990 -1991. The Iraqi government responded to the international sanctions by printing money to finance its operations, stoking inflation and debasing the currency. Other economic problems were strictly domestic in origin. The government controlled investment decisions through its control of oil revenues, propped up money-losing state-owned enterprises and spent billions on wasteful consumer subsidies. Non-
The paper discusses the reasons for central bank (CB) issuance of securities, and reasons for choosing different approaches e.g. in maturities and target market. It provides evidence on the range of different approaches taken by those CBs which do issue, as well as suggesting reasons why some CBs do not; and provides operational guidelines on the major building blocks of the issuance of CB securities.
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.
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