Global Financial Stability Report, October 2010: Sovereigns, Funding, and Systemic Liquidity (World Economic and Financial Surveys)

Contents......Page 4
Preface......Page 8
Executive Summary......Page 10
A. What Is the Outlook for Global FinancialStability?......Page 16
B. Sovereign Risks and Financial Fragilities......Page 19
C. Sovereign and Banking System Spillovers......Page 28
D. Managing Risks to Emerging Markets......Page 40
E. Policy Priorities......Page 47
Annex 1.1. Impact of Adverse Growth Shock on Advanced Economy Debt Ratios......Page 55
Annex 1.2. Systemic Contingent Claims Analysis of Banking and Sovereign Risk......Page 56
Annex 1.3. Analyzing Portfolio Inflows to Emerging and Selected Advanced Markets......Page 60
Annex 1.4. Asia’s Local Currency Corporate Bond Market—A New Spare Tire......Page 65
Annex 1.5. Where Now for Fannie and Freddie? A Review of the Options......Page 67
References......Page 68
Summary......Page 72
Review of the Systemic Liquidity Shock through Various Short-Term Funding Markets......Page 74
Funding Markets as Propagation Channels of Systemic Liquidity Risk......Page 79
Policies to Strengthen the Resilience of Funding Markets......Page 85
Policies to Strengthen Prudential Liquidity Regulations for Institutions......Page 91
Outstanding Policy Issues in Addressing Systemic Liquidity Risk......Page 93
References......Page 96
Summary......Page 100
Basic Rating Definitions and Principles......Page 103
The Evolving Roles and Regulation of Credit Ratings and Credit Rating Agencies......Page 106
Fundamental Sovereign Credit Risk Analysis......Page 113
The Accuracy and Informational Value of Sovereign Ratings......Page 118
Conclusions and Policy Implications......Page 126
Annex 3.1. Credit Rating Agencies around the World......Page 133
References......Page 134
Glossary......Page 138
Annex: Summing Up by the Acting Chair......Page 146
Statistical Appendix......Page 5