Crisis-Related Measures in the Financial System and Sovereign Balance Sheet Risks

Date: July 31, 2009
Electronic Access: Full Text

Summary:This paper examines the fiscal and financial risk implications of support measures in a sovereign balance sheet framework, making the point that the ultimate fiscal cost will depend on how balance sheets are managed—both in the near-term and as governments develop unwinding strategies. It suggests some key principles for efficient and transparent management of new assets, liabilities, and associated risks, and for moving toward an orderly disengagement.

Series : Policy Paper
Subject(s): Sovereign debt | External debt | Financial systems | Financial crisis | Intervention | Fiscal policy | Public finance | Fiscal management | Fiscal stability | Monetary policy
Notes: Prepared by a staff team supervised by Adrienne Cheasty and Udaibir S. Das and comprising Luis Cortavarria, Vincenzo Guzzo, Allison Holland, Philippe Karam, Daehaeng Kim, Ian Lienert, Edouard Martin, Michael Papaioannou, Iva Petrova, Abdourahmane Sarr, Mark Stone, and Mauricio Villafuerte.