IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/95754.html
   My bibliography  Save this paper

RFAs' Financial Structures and Lending Capacities: a Statutory, Accounting and Credit Rating Perspective

Author

Listed:
  • Cheng, Gong
  • Lennkh, Rudolf Alvise

Abstract

This paper documents the diverse financial structures – including capital structures and funding strategies – of Regional Financing Arrangements (RFAs) and offers an analysis of RFAs’ lending capacity from a statutory, accounting and credit rating perspective. Using credit rating agencies’ methodologies, the paper presents the dynamic relationship between RFAs’ financial structures, the support from their member states and their resulting creditworthiness. A stylized model is developed to demonstrate how the relative size of an institution’s paid-in compared with its callable capital, together with its member states’ support, could have an impact on the overall credit rating and lending capacity of an RFA. This paper contributes to the growing policy discussions on the heterogeneity of RFAs and their rising importance in the Global Financial Safety Net.

Suggested Citation

  • Cheng, Gong & Lennkh, Rudolf Alvise, 2018. "RFAs' Financial Structures and Lending Capacities: a Statutory, Accounting and Credit Rating Perspective," MPRA Paper 95754, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:95754
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/95754/1/MPRA_paper_95754.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sussangkarn, Chalongphob, 2010. "The Chiang Mai Initiative Multilateralization: Origin, Development and Outlook," ADBI Working Papers 230, Asian Development Bank Institute.
    2. Bussière, Matthieu & Cheng, Gong & Chinn, Menzie D. & Lisack, Noëmie, 2015. "For a few dollars more: Reserves and growth in times of crises," Journal of International Money and Finance, Elsevier, vol. 52(C), pages 127-145.
    3. Joshua Aizenman & Jaewoo Lee, 2007. "International Reserves: Precautionary Versus Mercantilist Views, Theory and Evidence," Open Economies Review, Springer, vol. 18(2), pages 191-214, April.
    4. Gong Cheng & Dominika Miernik & Teuta Turani, 2020. "Finding complementarities in IMF and RFA toolkits," Discussion Papers 8, European Stability Mechanism, revised 25 Oct 2021.
    5. Maurice Obstfeld & Jay C. Shambaugh & Alan M. Taylor, 2009. "Financial Instability, Reserves, and Central Bank Swap Lines in the Panic of 2008," American Economic Review, American Economic Association, vol. 99(2), pages 480-486, May.
    6. Chalongphob Sussangkarn, 2010. "The Chiang Mai Initiative Multilateralization : Origin, Development and Outlook," Governance Working Papers 22821, East Asian Bureau of Economic Research.
    7. C. Randall Henning, 2009. "The Future of the Chiang Mai Initiative: An Asian Monetary Fund?," Policy Briefs PB09-5, Peterson Institute for International Economics.
    8. Changyong Rhee & Lea Sumulong & Shahin Vallée, 2013. "Global and regional financial safety nets- lessons from Europe and Asia," Working Papers 801, Bruegel.
    9. Hal Hill & Jayant Menon, 2014. "Financial safety nets in Asia: genesis, evolution, adequacy and way forward," Chapters, in: Masahiro Kawai & Peter J. Morgan & Pradumna B. Rana (ed.), New Global Economic Architecture, chapter 5, pages 83-111, Edward Elgar Publishing.
    10. Cheng, Gong, 2015. "The Global Financial Safety Net through the Prism of G20 Summits," MPRA Paper 68070, University Library of Munich, Germany, revised Nov 2015.
    11. Barry Eichengreen, 2012. "Regional Financial Arrangements and the International Monetary Fund," Finance Working Papers 23354, East Asian Bureau of Economic Research.
    12. Volz, Ulrich, 2012. "The need and scope for strengthening co-operation between regional financing arrangements and the IMF," IDOS Discussion Papers 15/2012, German Institute of Development and Sustainability (IDOS).
    13. Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Global horse trading: IMF loans for votes in the United Nations Security Council," European Economic Review, Elsevier, vol. 53(7), pages 742-757, October.
    14. Gong Cheng & Dominika Miernik & Yisr Barnieh & Beomhee Han & Ika Mustika Sari & Faith Qiying Pang & Tigran Kostanyan & Alexander Efimov & Marie Houdart & Alexandra de Carvalho & Carlos Giraldo & Vivia, 2018. "IMF–RFA collaboration: motives, state of play, and way forward," Discussion Papers 4, European Stability Mechanism, revised 27 Oct 2021.
    15. Stracca, Livio & Scheubel, Beatrice, 2016. "What do we know about the global financial safety net? Rationale, data and possible evolution," Occasional Paper Series 177, European Central Bank.
    16. Ulrich volz, 2012. "Strengthening Cooperation between Regional Financing," Papers and Proceedings 11855, Fondo Latino Americano de Reservas - FLAR.
    17. C. Randall Henning, 2002. "East Asian Financial Cooperation," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa68, January.
    18. Miller, Merton H, 1977. "Debt and Taxes," Journal of Finance, American Finance Association, vol. 32(2), pages 261-275, May.
    19. C. Randall Henning, 2011. "Coordinating Regional and Multilateral Financial Institutions," Working Paper Series WP11-9, Peterson Institute for International Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carlos Giraldo, 2018. "IMF–RFA collaboration: motives, state of play, and way forward A joint RFA staff proposal," Documentos de Discusión FLAR 19452, Fondo Latino Americano de Reservas - FLAR.
    2. Gong Cheng & Dominika Miernik & Teuta Turani, 2020. "Finding complementarities in IMF and RFA toolkits," Discussion Papers 8, European Stability Mechanism, revised 25 Oct 2021.
    3. Gong Cheng & Dominika Miernik & Yisr Barnieh & Beomhee Han & Ika Mustika Sari & Faith Qiying Pang & Tigran Kostanyan & Alexander Efimov & Marie Houdart & Alexandra de Carvalho & Carlos Giraldo & Vivia, 2018. "IMF–RFA collaboration: motives, state of play, and way forward," Discussion Papers 4, European Stability Mechanism, revised 27 Oct 2021.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ulrich Volz, 2013. "Lessons of the European crisis for regional monetary and financial integration in East Asia," Asia Europe Journal, Springer, vol. 11(4), pages 355-376, December.
    2. Scheubel, Beatrice & Stracca, Livio & Tille, Cédric, 2019. "Taming the global financial cycle: What role for the global financial safety net?," Journal of International Money and Finance, Elsevier, vol. 94(C), pages 160-182.
    3. Cheng, Gong, 2015. "The Global Financial Safety Net through the Prism of G20 Summits," MPRA Paper 68070, University Library of Munich, Germany, revised Nov 2015.
    4. C. Randall Henning & Mohsin S. Khan, 2011. "Asia and Global Financial Governance," Working Paper Series WP11-16, Peterson Institute for International Economics.
    5. Joseph Joyce & Raul Razo-Garcia, 2011. "Reserves, quotas and the demand for international liquidity," The Review of International Organizations, Springer, vol. 6(3), pages 393-413, September.
    6. D. Essers & E. Vincent, 2017. "The global financial safety net :In need of repair ?," Economic Review, National Bank of Belgium, issue ii, pages 87-112, september.
    7. IRC Taskforce on IMF Issues, 2018. "Strengthening the Global Financial Safety Net," Occasional Paper Series 207, European Central Bank.
    8. Catherine Figuière & Laëtitia Guilhot & Cyriac Guillaumin, 2013. "La question du régime de change en Asie de l'Est : Vers un bloc monétaire régional ?," Revue d'économie politique, Dalloz, vol. 123(2), pages 265-298.
    9. Julie Gilson, 2012. "Regional leadership—Japanese style: Japan through the crisis," Asia Europe Journal, Springer, vol. 9(2), pages 211-223, March.
    10. Eduardo Fernández-Arias & Eduardo Levy-Yeyati, 2012. "Global Financial Safety Nets: Where Do We Go from Here?," International Finance, Wiley Blackwell, vol. 15(1), pages 37-68, April.
    11. Choi, Woo Jin & Taylor, Alan M., 2022. "Precaution versus mercantilism: Reserve accumulation, capital controls, and the real exchange rate," Journal of International Economics, Elsevier, vol. 139(C).
    12. Aizenman, Joshua & Cheung, Yin-Wong & Ito, Hiro, 2015. "International reserves before and after the global crisis: Is there no end to hoarding?," Journal of International Money and Finance, Elsevier, vol. 52(C), pages 102-126.
    13. Titelman Kardonsky, Daniel & Vera, Cecilia & Carvallo, Pablo & Pérez Caldentey, Esteban, 2014. "A regional reserve fund for Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    14. Aizenman, Joshua & Cheung, Yin-Wong & Qian, XingWang, 2020. "The currency composition of international reserves, demand for international reserves, and global safe assets," Journal of International Money and Finance, Elsevier, vol. 102(C).
    15. Scheubel, Beatrice & Stracca, Livio, 2019. "What do we know about the global financial safety net? A new comprehensive data set," Journal of International Money and Finance, Elsevier, vol. 99(C).
    16. Gong Cheng & Dominika Miernik & Yisr Barnieh & Beomhee Han & Ika Mustika Sari & Faith Qiying Pang & Tigran Kostanyan & Alexander Efimov & Marie Houdart & Alexandra de Carvalho & Carlos Giraldo & Vivia, 2018. "IMF–RFA collaboration: motives, state of play, and way forward," Discussion Papers 4, European Stability Mechanism, revised 27 Oct 2021.
    17. Edwin M. Truman, 2011. "Asian regional policy coordination," Proceedings, Federal Reserve Bank of San Francisco, issue Nov, pages 247-292.
    18. Stracca, Livio & Scheubel, Beatrice, 2016. "What do we know about the global financial safety net? Rationale, data and possible evolution," Occasional Paper Series 177, European Central Bank.
    19. Lin, Justin Yifu & Fardoust, Shahrokh & Rosenblatt, David, 2012. "Reform of the international monetary system : a jagged history and uncertain prospects," Policy Research Working Paper Series 6070, The World Bank.
    20. Kawai, Masahiro, 2015. "From the Chiang Mai Initiative to an Asian Monetary Fund," ADBI Working Papers 527, Asian Development Bank Institute.

    More about this item

    Keywords

    Regional Financing Arrangements; IMF; Credit rating; Capital; Lending Capacity; Global Financial Safety Net;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:95754. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.