Global Financial Stability Report
Market Developments and Issues
March 2003
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March 2003
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©2003 International Monetary Fund
Ordering Information
The Global Financial Stability Report provides semiannual assessments of global financial markets and addresses emerging market financing in a global context. |
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| Contents | |
| Preface | |
| Chapter I. | Overview (216KB pdf file) |
| Key Developments in Major Financial Centers | |
| Emerging Market Financing | |
| Measures to Improve Market Confidence | |
| Policy Issues in Developing Local Securities Markets | |
| Chapter II. | Key Developments and Sources of Financial Risk in the Major Financial Centers (617KB pdf file) |
| Major Developments in the Mature Markets | |
|
Have
Key Sectors Been Weakened Further or Strengthened? |
|
|
Withdrawal
from Risk Taking and Buildup of Cash Positions: Implications and Risks |
|
| References | |
| Chapter III. | Emerging Market Developments and Financing Prospects (398KB pdf file) |
| Emerging Market Flows Remain Weak | |
| Emerging Bond Markets Turn in Strong Performance | |
| Emerging Equity Markets Finished Lower in 2002 | |
| Syndicated Lending Turns Up Modestly | |
| Banking Sector Performance in Emerging Markets | |
| Outlook | |
|
Appendix:
A "Feast or Famine" Dynamic Prevails in Emerging Primary Markets |
|
| References | |
| Chapter IV. | Local Securities and Derivatives Markets in Emerging Markets: Selected Policy Issues (203KB pdf file) |
|
Local
Markets as Self-Insurance Against Volatile Capital Flows |
|
|
Extent
of Securities Market Development as an Alternative Source of Funding |
|
| Common Practices in Emerging Local Securities Markets | |
| Selected Policy Issues | |
| Concluding Remarks | |
| References | |
| Glossary (76KB pdf file) | |
| Annex: Concluding Remarks by the Acting Chair (86k pdf file) | |
| Statistical Appendix (895KB pdf file) | |
| Boxes | |
| 3.1 | The Risk of War and Emerging Market Vulnerabilities |
| 3.2 | Emerging Market Contagion in 2002 |
| 3.3 | Collective Action Clauses: Latest Developments |
| 4.1 | An International Solution for the Original Sin |
| Tables | |
| 1.1 | Financial Market Data |
| 2.1 | United States: Household Sector Balance Sheet |
| 2.2 | Internationally Active Financial Institutions: Equity Prices |
| 2.3 | Global Financial Institutions: Ratings and Capital Ratios |
| 3.1 | Emerging Market Financing |
| 3.2 | EMBI+ Performance |
| 3.3 | Currency of Issuance |
| 3.4 | Equity Markets Performance, 2002 |
| 3.5 | Valuation and Earnings Across Equity Markets |
| 3.6 | Emerging Market Countries: Financial Soundness Indicators |
| 4.1 | Reserves: Level and Ratio to GDP |
| 4.2 | Private Sector |
| 4.3 | Public Sector |
| 4.4 | Total of All Sectors |
| Figures | |
| 2.1 | Stock Market Performance |
| 2.2 | Price/Earnings Ratios |
| 2.3 | Selected Spreads |
| 2.4 |
Short-
and Long-Term Interest Rates in Government Securities |
| 2.5 | United States: Thirty-Year Mortgage Rate and Government Bond Yield |
| 2.6 | Selected Major Exchange Rates |
| 2.7 |
United
States: Net Portfolio Inflows and Net Total Capital Flows |
| 2.8 | United States: Household Net Worth Position |
| 2.9 | United States: Non-Financial Corporate Sector--Ratio of Broad Liquid Assets to Short-Term Debt |
| 2.10 | Internationally Active Financial Institutions: Relative Stock Prices |
| 2.11 | U.S. Banks: Relative Stock Prices |
| 2.12 | Large Insurance Companies: Relative Stock Prices |
| 2.13 | United States: Household Portfolio Allocation, Total Deposits |
| 2.14 | United States: Household Balance Sheets, Selected Items |
| 2.15 | Europe: Houshold Portfolio Allocation |
| 2.16 | Japan: Personal Sector Portfolio Allocation, Total Deposits |
| 2.17 | United States: Wholesale Cash Instruments Relative to Total Financial Claims |
| 3.1 | Cumulative Gross Annual Issuance of Bonds, Loans, and Equity |
| 3.2 | Emerging Market Financing |
| 3.3 | Sovereign Spreads |
| 3.4 | Risk Appetite and Emerging Market Debt |
| 3.5 | Emerging Markets and High-Yield Fund Flows |
| 3.6 | Bond Issuance |
| 3.7 | Share of Bond Issues |
| 3.8 | Emerging Market Equities and U.S. Treasuries |
| 3.9 | Emerging Market Equity Volatility |
| 3.10 | Correlations of S&P 500 with Emerging Markets |
| 3.11 | Asian Emerging Market Equities and Semiconductor Chips |
| 3.12 | Returns and Total Risk, 2002:Q4 |
| 3.13 | U.S.-Based Mutual Funds Flows into Emerging Market, Emerging Asian, and Latin American Equities |
| 3.14 | Cumulative Gross Annual Issuance of Equity |
| 3.15 | Equity Placements |
| 3.16 | S&P 500 Earnings per Share |
| 3.17 | Cumulative Gross Annual Loan Issuance |
| 3.18 | Syndicated Loan Commitments |
| 3.19 | Loan-Weighted Interest Margin |
| 3.20 | Market Valuation |
| 3.21 | Sovereign Spreads Versus Historical Lows |
| 3.22 | Risk Versus Return, January 1998–December 2002 |
| 3.23 | EMBI+ with Periods of Opening and Closure |
| 3.24 | EMBI+ Volatility During Market Closures |
| 3.25 | VIX Index and Primary Market Closures, 1994–96 |
| 3.26 | VIX Index and Primary Market Closures, 1997–2002 |
| 3.27 | BBB-BB Spread Differentials and Primary Market Closures, 1994–96 |
| 3.28 | BBB-BB Spread Differentials and Primary Market Closures, 1997–2002 |
| 4.1 | Chile: Amount Outstanding of Private Nonfinancial Sector Bonds |
