Public Information Notice: IMF Executive Board Discusses Balance Sheet Approach to Analysis of Debt-Related Vulnerabilities in Emerging Markets, March 22, 2005

Integrating the Balance Sheet Approach into Fund Operations, February 23, 2004

The Balance Sheet Approach and its Applications at the Fund
June 30, 2003

A Balance Sheet Approach to Financial Crisis
December 1, 2002

Data Provision to the Fund for Surveillance Purposes
April 26, 2002

External Debt Statistics Guide for Compilers and Users
June 25, 2003

Original Sin-Balance Sheet Crises, and the Roles of International Lending
December 1, 2002

Vulnerability Indicators, A Factsheet

Debt-Related Vulnerabilities and
Financial Crises—An Application of
the Balance Sheet Approach to Emerging Market Countries

Prepared by the Policy Development and Review Department, in consultation with other departments

July 1, 2004

Use the free Adobe Acrobat Reader to view the pdf file (250 kb)

Also see October 2005 version, published in the Occasional Paper series.

Executive Summary
I. Introduction
II. Public and Private Sector Balance Sheets in Emerging Market Countries: Recent Trends and Key Risks
  A. The Public Sector's Balance Sheet
  B. The Financial Sector's Balance Sheet
  C. The Nonfinancial Private Sector's Balance Sheet
  D. Presenting Economy-Wide Vulnerabilities
III. Balance Sheet Developments in Recent Financial Crises: Some Country Examples
  A. Argentina: How Weaknesses in Private Sector Balance Sheets Contributed to the Crisis of 2001-02
  B. Uruguay: How a Run on Banks Led to a Sovereign Debt Crisis
  C. Turkey: How Banks' Balance Sheet Positions Contributed to the Crisis of 2000-01
  D. Brazil: How the Public Sector Leveraged its Balance Sheet to Insulate the Private Sector from the 1998-1999 Currency Crisis
  E. Peru: How A Highly Dollarized Economy Remained Resilient in the Face of Regional Financial Turmoil
  F. Lebanon: How Confidence Can Uphold Fragile Balance Sheets
IV. Conclusions
Annex I
Regional Groupings
Annex II
Definitions and Sources for Chapter II
1. The Balance Sheet Approach in the Recent Literature
2. The Balance Sheet Approach in Practice
3. Extensions of the Balance Sheet Approach
III.A.1 Argentina: Foreign-Currency Denominated Debt of the Corporate Sector
III.A.2 Argentina: Principal Assets and Liabilities of the Argentine Banking System
III.B.1 Uruguay: Deposit Structure, by Residency
III.E.1 Peru: Foreign-Currency Debt and Foreign-Currency Income in the Private Nonfinancial Sector
II.1 Public Debt
II.2 Public Domestic vs. Public External Debt
II.3 Public Domestic vs. Foreign-Currency Debt
II.4 Privately-Held vs. Officially-Held Public Debt
II.5 Average Maturity of Public External Debt
II.6 Structure of Domestic Government Bonds
II.7 Public Sector Debt Sustainability Assessments
II.8 Primary Balance
II.9 Total Public External Debt
II.10 Gross and Net Reserves
II.11 Banking Sector Assets
II.12 Credit to the Private vs. Public Sectors
II.13 Foreign-Currency Deposits
II.14 Domestic Foreign-Currency Loans
II.15 Short-Term External Debt and Foreign-Currency Deposits
II.16 Nonfinancial Private Sector Debt
II.17 Nonfinancial Private Sector External Debt and Private Domestic Foreign-Currency Debt
II.18 Liabilities of BIS-Reporting Banks to Nonfinancial Sector
II.19 Nonfinancial Private Sector External Debt and Private Domestic Foreign-Currency Debt
II.20 Economy-Wide Vulnerabilities, Emerging Markets
II.21 Economy-Wide Vulnerabilities, Regional
II.22 Vulnerabilities in Crisis and Non-Crisis Countries
III.A.1 Argentina: Maturity Mismatches: With and Without Foreign-Currency Deposits
III.B.1 Uruguay: Dollarization of Deposits and Loans
III.B.2 Uruguay: System-Wide Foreign-Currency Balance Sheet
III.B.3 Uruguay: Maturity Mismatch and Domestic Foreign-Currency Deposits
III.B.4 Uruguay: Foreign-Currency Balance Sheets
III.B.5 Uruguay: Foreign-Currency Balance Sheets
III.B.6 Uruguay: Gross Reserves
III.B.7 Uruguay: Combined Public-Sector Debt
III.C.1 Turkey: Primary Auction Interest Rates in Real Terms
III.C.2 Turkey: Banking Sector Assets
III.C.3 Turkey: Funding from Foreign Banks
III.C.4 Turkey: Banks' Net Open Foreign-Currency Positions
III.C.5 Turkey: Change in Public Debt to GDP Ratio: Component Contribution by Year
III.C.6 Turkey: Public Debt by Instrument
III.D.1 Brazil: Growth Effect of Real Currency Crises
III.D.2 Brazil: NFA of Banking System
III.D.3 Brazil: Corporate Sector External Debt
III.D.4 Brazil: Composition of Federal Debt
III.D.5 Brazil: Net Foreign-Currency Assets and Composition
III.D.6 Brazil: Key Vulnerability Ratios
III.E.1 Peru: Share of Foreign Currency and External Debt
III.E.2 Peru: Foreign-Currency Mismatch
III.E.3 Peru: Liquid Dollar Assets Versus Banks' Short-Term Dollar Liabilities
III.E.4 Peru: Liquid Dollar Assets Versus Banks' Dollar Liabilities and Short-Term Foreign Debt
III.E.5 Peru: External and Financial Vulnerability Ratios
III.F.1 Lebanon: Public Sector Balance Sheet
III.F.2 Lebanon: Private Financial Sector Balance Sheet