Government Expenditure Arrears : Securitization and Other Solutions

Author/Editor:

Alberto M. Ramos

Publication Date:

May 1, 1998

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

On occasions, by running arrears, governments have unilaterally borrowed from domestic agents. These agents ended up with implicit claims on the government for which they had no title and that would be honored, at best, on an unspecified future date and for an uncertain value. Having untitled assets limits creditors’ financial management capacity, because they cannot trade or enforce these claims. This paper presents several options for addressing the arrears problem. It recommends that the government recognize its implicit financial liabilities, set a timetable for their clearance, and issue market-negotiable titles (securitize). Several country experiences with securitization operations are documented.

Series:

Working Paper No. 98/70

Subject:

English

Publication Date:

May 1, 1998

ISBN/ISSN:

9781451849127/1018-5941

Stock No:

WPIEA0701998

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

29

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