Latin pioneers

More than at any time since 1998, the last year has seen the IMF and World Bank in the dock. In one sense the crisis has given them a new lease of life, a new relevance. As the crisis has unfolded, the IMF has been given greater funds to cope with an expected spike in demand. It has worked hard to shed the traditional stigma attached to IMF aid, and created new support packages – acknowledging that, with aid as with so much else, one size often does not fit all. That is the case for the defence. The prosecution’s case hinges on the speed – or...

The headlines fell to the IMF by dint of the enormous sums involved, and the public nature of their announcement. In April, when the G20 group of leaders spoke of committing US$1.1trn to combat the financial crisis, US$750bn was pledged via the IMF – a trebling of its lendable resources. The institution’s emphasis appeared to be on building its power to act. Andrew Tweedie, the director of the IMF’s finance department, said in the IMF’s own in-house magazine that the IMF built bilateral borrowing arrangements “to strengthen its lending war...

Turkey has spent much of this year in negotiations with the IMF for a loan that many suspected it didn’t want, and some insisted it didn’t need. Early delays were blamed on Turkey’s regional elections last spring, for which the government was reluctant to weaken its hand by accepting what would have been perceived by some as charity. There was a feeling in Turkey that once the elections were behind it, the ruling AKP party would soften its resistance to the loan and do the deal. But the elections came and went, and no deal materialised. Now...

Less reliance on foreign funding and strong support from the central government is helping Russian banks emerge from the global credit crisis quicker than their neighbours in Eastern Europe or the Commonwealth of Independent States (CIS). “We have nearly reached the bottom in Russia,” said Dmitry Dmitriev, head of research covering financial institutions at VTB Capital in Moscow. “There will be two-three more bad quarters in terms of banks' results and then, after that, the recovery will be in full effect.” Others are more cautious. “It is...

Traditionally, Brazilians have been wedded to investing in certificates of deposit, a result of persistently high interest rates. However, on June 10, the Brazilian central bank reduced the overnight lending rate, called Selic, to under the psychologically important 10% level. It now stands at 8.75% – the lowest level in living memory. “Brazil has had this Disneyland in the past of real rates well above any comparison with the developed world,” said Marcos Duarte, a partner at Polo Capital Management, a Rio de Janeiro-based shop with US$1bn...

After much talk about the resilience of the GCC market in these tough economic times, the recession has finally bitten. The increasing number of corporate defaults and real estate devaluations, and ongoing credit contraction, have all contributed to market woe. It has been a busy period for the region’s lawyers. But the region’s have also been forced to look at the long-untouched insolvency and bankruptcy laws, which have struggled to cope with increased market stress. Regulators and government officials fear loosing future foreign investment...

With the Kirchner presidency in a weaker position and Argentina facing financing pressures amid a weak global economy, many market participants hope the country will soon reconcile with the IMF. A resolution of its holdouts problems would reopen international markets to the faltering state. Such talk has of course been heard before and hence generates understandable scepticism. Yet there are signs that this time may be different. Over the last year, efforts have been made to restore some sense of normalcy in Argentina's relationship with the...

The “two Gs,” Ghana and Gabon, both of which brought highly successful sovereign bond deals to the international capital markets in 2007, were not spared by the 2008 market downturn. Like other emerging market credits, prices on Gabonese and Ghanaian bonds were also dragged down. Yet experts still believe that these issues did a great deal to open investors’ minds to Africa – a place that has always been viewed as the preserve of the truly daring. Since those issues came to market there been increased interest in African exposure, which in turn...

Governments around the world have earmarked funds to deal with the damage that catastrophes and extreme forms of weather can have upon livelihoods, and multilateral agencies such as the World Bank do their share in providing financial assistance. Yet having an affordable insurance solution in place before a crisis hits is, experts believe, the optimal solution for managing natural disaster risk, ensuring it doesn’t drain emerging economies by increasing their debt burden. Insurers and reinsurers in the emerging markets, unlike those in OECD...