Since 2009, the World Bank has been conducting financial crisis simulation exercises and learning valuable lessons on where institutional vulnerabilities lie. These exercises are intended to test, or simply to practice, the use of existing or proposed legal instruments, interagency and/or cross-border agreements, and other crisis management arrangements. More than 20 exercises in all world regions have been executed so far, focusing either on the interaction among top national authorities (typically between the Ministry of Finance, the Central Bank, the Bank and non-bank Supervisors, and the Deposit Insurance Agency), or on the interaction among bank supervisors of different national jurisdictions dealing with cross-border issues.
Financial Markets…US treasuries gained and the benchmark 10-year bond yield edged down 1 basis point to 1.66%, after rising as high as 1.7% earlier, while the 30-year bond yield slid by 2 bps to 2.83% in early Friday session after a government report on wholesale price in September showed domestic inflation remained muted.
Financial Markets…European stocks slipped on Friday with the benchmark index falling to a three-week low as early optimism on Spain’s new austerity measures was short-lived.
Spanish 10-year bond yield rose back above 6% amid uncertainty over its troubled banks before stress test results, fading optimism on the country’s debt cutting plan, and a looming Moody’s rating review which may cost the country its investment grade rating.
- Congo, Democratic Republic of
- Dominican Republic
- Korea, Republic of
- South Africa
- East Asia and Pacific
- Europe and Central Asia
- Latin America & Caribbean
- Middle East and North Africa
- Financial Sector
- Macroeconomics and Economic Growth
- Central banks
- financial markets
- retail sales
- consumer price inflation
- Industrial Production
- monetary policy measures
The latest bout of G3 monetary stimulus is likely to increase capital flows to developing countries, but may be limited by lingering economic uncertainty, and lower interest rate spreads. Notwithstanding the recent easing of financial market tensions, the anticipated rebound in real-side activity is lagging behind.
Important developments today:
1. Japanese Yen strengthens as the country’s current account turns to surplus again
2. Japan’s current account returns to surplus in February
Important developments today:
1. European sovereign credit risk rises to eight-week high following Greek debt swap insurance payouts
2. Italy in recession
We have just published a working paper reporting on a global survey of central banks on how governments regulate and collect data on cross-border remittance flows.* During 2008-9, we sent questionnaires - an inflow module or an outflow module, depending on whether the country is largely migrant-sending or migrant-receiving - to 176 central banks and other national institutions involved in remittances. 114 institutions responded.
These responses indicate that:
- There is a need for more frequent and better coordinated data collection across national institutions, among different divisions within the same national institution, and among countries.
- Countries should monitor (I mean, try to understand) new channels and technologies in monitoring remittance flows. Authorities should work closely with mobile phone operators to strike the right regulatory balance.
- The high cost of transfers was cited in the survey as the top factor inhibiting the use of formal channels.
- Many countries, particularly in Africa, have made progress in avoiding exclusivity contracts, which helps increase competitiveness and reduce transfer costs. But further policy reforms and initiatives are needed.