Sovereign Borrowing Cost and the IMF’s Data Standards Initiatives
IMF Working Papers, March 1, 2006
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- Sovereign Borrowing Cost and the IMF’s Data Standards Initiatives
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Bibliographic details
- Authors: John Cady, Anthony J. Pellechio
- Published: March 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451863383.001
Key findings
- The effects of the IMF's data standards initiatives on sovereign borrowing costs in private capital markets are investigated for 26 emerging market and developing countries.
- Subscription to the Special Data Dissemination Standard (SDDS) reduces launch spreads by an average of 20 percent.
- Participation in the General Data Dissemination System (GDDS) reduces spreads for those countries with access to capital markets by an average of 8 percent.
- These estimates correspond to discounts of some 50 and 20 basis points, respectively.
- Evidence of similar discounts is also found when launch yields are analyzed.
Quantitative estimates and measures
- Sample size: 26 emerging market and developing countries.
- SDDS effect on launch spreads: average reduction of 20 percent.
- GDDS effect on launch spreads (for market-access countries): average reduction of 8 percent.
- Corresponding discounts: some 50 basis points (SDDS) and 20 basis points (GDDS).
- Similar discounts observed in analyses of launch yields.
Scope, methods, and robustness
- Analysis: stable and significant panel econometric estimates.
- Outcome measures: launch spreads and launch yields in private capital markets.
- Population: emerging market and developing countries with varying access to capital markets.
Policy implications and interpretation
- Adoption of the IMF's data dissemination standards (SDDS and GDDS) is associated with measurable reductions in sovereign borrowing costs in private markets.
- The magnitudes reported—20 percent and 8 percent reductions in launch spreads, and discounts of some 50 and 20 basis points—provide quantifiable benefits of data transparency and adherence to IMF data standards.
Publication and metadata
- By John Cady, Anthony J. Pellechio
- March 1, 2006
- Pages: 26
- Volume: 2006
- Issue: 078
- Series: Working Paper No. 2006/078
- DOI: https://doi.org/10.5089/9781451863383.001
- Stock No: WPIEA2006078
- ISBN: 9781451863383
- ISSN: 1018-5941
Source: IMF Working Papers — "Sovereign Borrowing Cost and the IMF’s Data Standards Initiatives" by John Cady and Anthony J. Pellechio (March 1, 2006).