Moving the goalposts – To paraphrase Woody Allen, if the IMF didn’t exist, perhaps it would be necessary to invent it. Few doubt that we need it, or something like it. This report looks at the IMF’s evolving role five years on from the financial crisis alongside that of the development finance bodies such as the World Bank Group and regional development banks, and considers whether these institutions are adapting to the world’s new financial architecture – or simply trying to adapt that architecture to suit their outlook.
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The IMF presents itself as the world’s police officer, or at least its willing auditor. But many see it as an alarmingly out of touch body staffed by Ancien Regime Europeans, lacking the ability to police itself, let alone an increasingly chaotic world.
“Synergy” may be on everyone’s lips as the World Bank undergoes yet more reform, but for the IBRD/IDA that may mean falling in step with an increasingly dominant IFC.
Development banks have never had it so good. Not so long ago, many were threatened with downsizing, even extinction. Some lacked the financial or political clout to make confident decisions; others, notably in emerging markets, struggled to find a coherent role in a Western-dominated world.
There is much debate about the relevance of rating agencies, yet for all the sneering they remain a formidable presence in the capital markets. Despite the heightened turbulence of the sovereign debt crisis, their record of rating sovereigns remains impressive.
Considerable disenchantment exists towards the IMF after the way it handled the Greek bailout, and the subsequent battle by some bondholders who had held out from Argentina’s exchanges to obtain full payment in New York.
Global growth has appeared like a mirage this year – permanently out of reach. Economic indicators, however, suggest growth is just round the corner.
Emerging market debt has been a huge growth market in recent years, with investors piling into deals across the board. Have tapering and falling growth cauterised a budding market, leaving bankers and investors to wonder when – or whether – the good times will return?
The first five months of the year suggested that 2013 was heading towards a record year for EM debt. Even though the threat of the removal of QE spooked the markets it is not all doom and gloom.
Demand for Islamic finance products continues to grow apace, but regulators across the Middle East and Malaysia hope new co-ordinated legislation will take the market to the next level in the coming years. What remains to be done to take Islamic finance to the next step?
With slowing growth and a less certain outlook for emerging markets, just how equipped is Russia’s banking system to deal with the latest round of volatility?
After nationwide protests in May and an emerging market rout in August has the shine come off the Turkish growth story? Is the country likely to see a return to past volatility?
Long seen as Latin America’s laggard, Mexico is finally watching its star rise, making it the new stomping ground for both ECM and DCM bankers. However, such bullishness is being tempered by the realities of a market now in retreat from EM.