Emerging Market Securities Access to Global Plumbing

Gongpil Choi, Federico Ortega and Manmohan Singh

No 2021/094, IMF Working Papers from International Monetary Fund

Abstract: What are the constraints that have stalled EMs efforts to reuse their securities in international financial centers? We discuss the economics of collateral re-use and the present institutional structure in Asian and Latin American countries. Our empirical investigation suggests pledgeability enhances financial stability and reduces dollar funding risk. We also explain the Eurozone collateral pool to incentivize EMs, and why many securities (e.g., BTPs, Italy) are acceptable in London but not EM securities. Looking forward, EMs liaison with International Central Securities Depositories (ICSDs), and global banks’ balance sheet capacity to intermediate cross-border collateral will be crucial for this market to develop.

Keywords: EM securities; global plumbing; collateral markets; Asia; Latin America; Eurozone; emerging market securities access; EMs effort; collateral market; finance market; Collateral; Securities; Financial statements; Financial sector stability; Securities markets; Global; Asia and Pacific; Europe; Caribbean (search for similar items in EconPapers)
Pages: 37
Date: 2021-03-26
New Economics Papers: this item is included in nep-ifn
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