Alfonso García Mora

What an honor! IDB Invest was awarded as one of the Highly Commended Winners by Treasury Today Group for Best Sustainable Treasury Solution. This award reflects our overall approach (framework, reporting and market positioning) and our innovative track record of issuing sustainable debt in capital markets. The award is due to the amazing work and dedication of the colleagues across IDB Invest, and to the vision and support by our senior management team!   You can watch the announcement at https://lnkd.in/dnSXDZMX.   #treasuryawards #bestinclass #corporatetreasuryawards #IDBInvest #IDBITreasury #CapitalMarkets #SustainableFinance #LocalCurrency #LatinAmerica #Caribbean

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We pioneered the climate-resilient debt clause (CRDC), an innovative financial instrument designed to strengthen #ClimateChange resilience in the countries of #LatinAmerica and the #Caribbean. The CRDC allows borrowers to defer principal repayments on loans for up to two years following a natural disaster, and it's now a standard feature of our lending. In fact, $1.6 billion of our loans have this tool activated. Check out our latest "Investor Highlights" for details on this instrument, our new IDBStrategy+ and more. #Investors #FinancialInnovation #ClimateResilience

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Thanks to the OECD - OCDE for an event that helped understanding better a series of challenges we all share, demography, green transition, cohesion and digital divide. And, yes, there are great experiences out there to learn from. Poste Italiane

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International Monetary Fund's latest message to G20 Brasil 2024 on financing the green transition: "The IMF is doing its part through our lending, policy advice, capacity development, and #data initiatives. On lending, our new instrument, the Resilience and Sustainability Facility (RSF), helps vulnerable countries to build resilience to climate change. We have approved 20 RSFs with total commitments of more than $9.3 billion, of which $2.5 billion has already been disbursed. On policy advice, we are helping countries improve macroeconomic stability and strengthen policy frameworks. We have also started incorporating #climate risk in our Financial Sector Assessment Programs (FSAPs). Our capacity development is helping countries through training and policy diagnostics. On data, we are contributing to international efforts to strengthen the availability, reliability and comparability of climate data. Finally, I welcome efforts to promote the use of climate resilient #debt clauses (CRDCs), which strengthen the resilience of borrowing countries and may act as a steppingstone for a broader adoption of wider state-contingent debt instruments" https://lnkd.in/ggB-qkc9

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My latest: the IMF needs more operational independence from everyone (including the US government) to remain legitimate and useful when its three major shareholders keep misbehaving. In the new issue of IMF Finance & Development Magazine for the 80th anniversary of Bretton Woods - how I fix the Fund for the future https://lnkd.in/e8raWD-d

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IFC - International Finance Corporation and Citi to support sustainable supply chain finance in Mexico - IFC and Citi are implementing a $500 million facility in Mexico as part of a $2 billion sustainable supply chain finance program for emerging markets. - This is the largest project to date under IFC's Global Supply Chain Finance Program launched in 2022 to address global supply chain disruptions. - The program aims to fill supply chain finance gaps for SMEs and expand access to sustainable supply chain finance. - Nathalie Louat from IFC emphasized the importance of trade and supply chain finance in supporting sustainability and providing financing to traditionally unbankable suppliers in Mexico. - Murat Demirel from Citi expressed enthusiasm for collaborating with IFC and expanding the initiative into other emerging and frontier markets. - This facility will build on IFC's advisory work aimed at developing local credit infrastructure and introducing new financing products in Mexico. - IFC has been working with Mexican authorities to strengthen the legal foundation of supply chain finance markets to support continued growth in financing. - IFC is part of the World Bank Group and focuses on creating markets and opportunities in developing countries, committing a record $56 billion in fiscal year 2024. - Citi operates in over 180 countries, providing a wide range of financial products and services for various clients. https://lnkd.in/gmJSvZZC

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What could help spark a sustained private investment acceleration? We show in our latest South Asia Development Update that greater trade openness, institutional improvements, and a well-aligned exchange rate make the onset of a sustained private investment acceleration more likely. Read more here: https://lnkd.in/eKa52rxq

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First #bluebond in #Thailand, first #blueloan in CEU, and the first private sector blue bond in Latin America: IFC - International Finance Corporation is breaking new ground with #bluefinance in emerging markets. Learn more here: https://lnkd.in/e32YWTQc #BlueFinance #IFCWater

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Antonio Guterres once again calls for reform of the global financial architecture, including MDB reform with reference to utilizing "callable capital" and for flexibility to be injected into the private creditor relationship. On the same day that Ghana is restricted from restructuring by the IMF, with Ghana already in default. This is precisely why understanding the underlying dynamics of the credit rating agencies is all important now - they sit at the heart of everything. MDBs need to scale up? CRAs have to approve. Private creditors need to be more flexible? CRAs have to approve or get out of the way. Vulnerable countries need to be able to restructure quickly and effectively? CRAs need to approve. It is the same story time and time again. https://lnkd.in/e5Rb4CTq The Credit Rating Research Initiative #creditratings #globalfinancialarchitecture #Ghana

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IFC - International Finance Corporation and Citi have agreed to implement a US$500m facility in Mexico as the first project under the umbrella of a US$2bn sustainable supply chain finance program focused on emerging markets that was signed today by the two institutions. #sustainability #greenfinance #supplychainfinance #reversefactoring #ifc #citi #bcrnews

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Is democracy good or bad for economic growth? A statistical study by Daron Acemoglu, Suresh Naidu, Pascual Restrepo, and James Robinson argues that democracy causes prosperity. The main result: A permanent transition to a democratic system increases income per person by about 18% after 25 years (image). The paper: • relies on data from 175 countries; • contains 122 democratisation episodes, and 71 reversals to non-democracy; • covers the period from 1960 to 2010. How does democracy lead to better economic performance? Mechanisms: • Implementation of growth-inducing policies. • Higher spending on health and education. • Lower risk of social unrest. • Larger tax revenues. Finally, does democracy need development to yield its positive outcomes? No: • The economic effects work for rich as well as poor countries. • And the link between the education level and the impact of democracy is quantitatively small. Paper link: https://lnkd.in/e2aMYuKP

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Public Debt levels are rising and getting costlier globally. While some Developed Economies are already at or above a Debt/GDP ratio of 100%, the burden of debt is more painful for emerging and frontier economies, especially in Asia and Africa. Some have already defaulted on their debt and are currently engaged in lengthy negotiations with private and official creditors to finalize a debt restructuring agreement. Given the current mix of creditors to sovereign states, the old model of debt restructuring under Paris Club is not efficient anymore. The programs introduced during the Covid 19 pandemic have also not proved to be effective due to concerns over rating downgrades and the possibility of a “default” classification due to restructuring. It is therefore critical that a new sovereign debt restructuring framework is established that covers all official and private creditors including multilateral institutions such as the IMF, World Bank, bilateral lenders such as China, Japan and commercial lenders such as banks and bond investors. “There is also the question of whether debts owed to MDBs and the IMF should be included in the restructuring processes, as was done for low-income countries in 2005. Moreover, the traditional separation between official and private creditors has been complicated by new official lenders, notably China, and the rise of various debt contracts, including guarantees to private investors, that are separate from bonds.” #debt #distressdebt #debtburden #emergingmarkets #frontiermarkets #debtrestructuring #imf #fixedincome #bonds

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📘 NEW IFC REPORT! IFC - International Finance Corporation has just published the study “The Economic Opportunity for Financial Inclusion of Forcibly Displaced People by the Financial Sector in Brazil”. The publication includes a comprehensive market assessment on the current demand and supply of financial and non-financial services for forcibly displaced people (FDP) in #Brazil. The report also provides the necessary inputs for the financial sector to elaborate or improve institutional strategies that recognize the economic opportunity related to the financial inclusion of this community in the country. Contrary to misconceptions that inhibit economic and financial integration of FDPs in Brazil, this segment has the potential to become promising customers for financial service providers. The report can be found in English and in Portuguese: https://lnkd.in/dA55X9KR ACNUR, Agência da ONU para Refugiados | UNHCR, the UN Refugee Agency

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IFC Recognizes Dashen Bank as Outstanding Global Trade Finance Program Issuing Bank The IFC - International Finance Corporation, the private sector arm of the World Bank Group, has given recognition to Dashen Bank SC, with an award dubbed “outstanding global trade finance program issuing bank”. The announcement and award were held at the 8th annual conference held in Barcelona, Spain. On another note, Dashen Bank has solidified its partnership with the IFC through a newly inked cooperation agreement, aimed at bolstering the bank's capacity to enhance its strategic exposure in the micro, small, and medium enterprises (MSMEs) and thereby attend access to finance agenda in a deliberate and objective models and framework. The cooperation agreement, signed between Dashen Bank and IFC in Kigali , Ruwanda at the 7th African CEO Forum will also make women-owned MSMEs  and agri-businesses a beneficiary and thereby advancing financial inclusion and access to finance initiatives of the Bank. IFC Africa #Ethiopia #DashenBank #MSME

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Are #ReserveRequirements effective at warding off #FinancialCrises? In a new Bank for International Settlements – BIS working paper, Carlos C., Rocio Gondo and Berenice Martinez assess the evidence. They find that find positive net benefits from using reserve requirements. That is, the fall in industrial production after a tightening in reserve requirements is compensated for by the gains from a lower probability of financial distress. They also find that reserve requirements have a stronger effect in #EmergingMarkets than in #AdvancedEconomies – both in terms of costs and benefits. Finally, uniform reserve requirements have a stronger effect than reserve requirements by maturity or currency. Read more at: https://lnkd.in/eqezwqDe

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Estimates of cross-border financial liabilities exceed those of cross-border financial assets, and particularly so for portfolio investment in #equity instruments (such as corporate stocks and investment fund shares). In a paper just posted on the #Brookings website I show how these "missing assets" are primarily foreign holdings of US stocks and Irish and Luxembourg investment fund shares whose ownership is not reflected in investor country statistics. A substantial share of these missing assets are traded in the United Kingdom, which is a large center for international asset management. How can we plug these statistical holes? Collecting data in financial centers such as the UK on third-party holdings (claims on nonresidents held by other nonresidents through resident institutions) is essential to gain a more accurate picture of the geography of international investment, all the more so given the increasing ease of investing directly across borders. https://lnkd.in/gpxB8AEf

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At the World Bank's Partnership for Market Implementation event in Cartagena, Colombia, Andrew Howard, Verra's senior director, climate policy and strategy, participated in the "Carbon Asset Registries: Ensuring Market Efficiency and Transparency" panel discussion. Speakers discussed collaborative efforts to develop a comprehensive playbook for Article 6 implementation. Andrew’s remarks focused on the need to develop clear, standard operating “best practices” to make it easier for countries to establish and operate their carbon markets. Such best practices would also help improve the accuracy, integrity, and transparency of information for each carbon credit across its entire lifecycle. Andrew was joined by Ana Dominguez Lopez, carbon pricing and carbon market expert, UNFCCC RCC Panama; Chimi Dorji, Department of Environment and Climate Change, Ministry of Energy and Natural Resources, Royal Government of Bhutan; Juan David Duran Hernandez, executive director, EcoRegistry; and Ieva Steponaviciute, community manager, Climate Action Data Trust. #Verra #Article6 #CarbonMarkets #CarbonCredits #ClimateChange #WorldBank

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How does access to #Credit influence economic outcomes and livelihoods? In a VoxDev article, Bernardus Doornik, Armando Gomes, David Schoenherr and Janis Skrastins, PhD summarise findings from their recent paper in the American Economic Review. They show with data from Brazil that access to credit for mobility (buying a motorcycle) allows workers to access new labor market opportunities and thus to increase formal employment, salaries and commuting distances. The estimates suggest that access to credit for investment in individual mobility generates a real annual return of 11.71 to 15.31% over 20 years. This underscores both the role of current frictions (eg spatial mismatches between workers and firms) and the potential of #FinancialServices to support better outcomes.

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Monetary Policy Matters (1): Federal Reserve Board and Bank of England maintain policy rates; Both seeking firmer evidence that inflation is moving sustainably to 2 percent. Two globally anticipated monetary policy decisions were announced this week: The decisions of the USA Federal Reserve Board on 31 January, and the Bank of England Monetary Policy Committee on 1st February. The Federal Reserve Board agreed to implement the decision of the FOMC to maintain the range for the Federal Funds Rate at 5.25 to 5.50% (and to continue to reduce security holdings). Although the rate of inflation (PCE prices) had declined to 2.6% for the year to December 2023 (and core PCE to 2.9%), Chair Powell commented that the FOMC “will still need to see continuing evidence to build confidence that inflation is moving sustainably toward our goal.” He did comment however, that the policy rate is “likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.” Powell observed the USA economy “has surprised forecasters in many ways since the pandemic, and ongoing progress toward our 2 percent inflation objective is not assured.” Nevertheless, his remarks imply the FOMC regard the risks to achieving its employment and inflation goals are dissipating. Access the FOMC statement here: https://lnkd.in/g8KVqEDC , and the transcript of Chair Powell’s press conference here: https://lnkd.in/guEbZPEQ FOMC minutes are scheduled for release on 21 February. The Bank of England’s Monetary Policy Committee voted on 31 January by a majority of 6 to 3 to maintain the Bank Rate at 5.25%. Although CPI inflation for the year to December 2023 had fallen by more than they expected in November to 4%, their concern is that “key indicators of inflation persistence remain elevated.” They comment that UK inflation has come down because the global sources of inflation have been abating, whereas persistence centres around wage growth and domestic inflation. Further, the MPC consider there are risks of higher global sources of inflation arising from geopolitical factors and the impact on shipping costs. The Committee judged monetary policy needs to remain restrictive for “Sufficiently long to return inflation to the 2% target sustainably in the medium term.” The Monetary Policy Summary and minutes can be accessed here: https://lnkd.in/g2Tiv6WV The press release opening remarks by Governor Bailey can be read here: https://lnkd.in/gwHYAxZi

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