Pension Privatization and Country Risk /

This paper explores how privatizing a pension system can affect sovereign credit risk. For this purpose, it analyzes the importance that rating agencies give to implicit pension debt (IPD) in their assessments of sovereign creditworthiness. We find that rating agencies generally do not seem to give...

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Bibliografiske detaljer
Hovedforfatter: Cuevas, Alfredo
Andre forfattere: Gonzalez, Maria, Lombardo, Davide, Lopez-Marmolejo, Arnoldo
Format: Tidsskrift
Sprog:English
Udgivet: Washington, D.C. : International Monetary Fund, 2008.
Serier:IMF Working Papers; Working Paper ; No. 2008/195
Online adgang:Full text available on IMF
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245 1 0 |a Pension Privatization and Country Risk /  |c Alfredo Cuevas, Maria Gonzalez, Arnoldo Lopez-Marmolejo, Davide Lombardo. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2008. 
300 |a 1 online resource (25 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a This paper explores how privatizing a pension system can affect sovereign credit risk. For this purpose, it analyzes the importance that rating agencies give to implicit pension debt (IPD) in their assessments of sovereign creditworthiness. We find that rating agencies generally do not seem to give much weight to IPD, focusing instead on explicit public debt. However, by channeling pension contributions away from the government and creating a deficit of resources to cover the current pension liabilities during the reform's transition period, a pension privatization reform may transform IPD into explicit public debt, adversely affecting a sovereign's perceived creditworthiness, thus increasing its risk premium. In this light, accompanying pension reform with efforts to offset its transition costs through fiscal adjustment would help preserve a country's credit rating. 
538 |a Mode of access: Internet 
700 1 |a Gonzalez, Maria. 
700 1 |a Lombardo, Davide. 
700 1 |a Lopez-Marmolejo, Arnoldo. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2008/195 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2008/195/001.2008.issue-195-en.xml  |z IMF e-Library