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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 (IDP) in their assessments of sovereign creditworthiness. We find that rating agencies generally do not s...
| Clasificación: | Libro Electrónico |
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| Autor principal: | |
| Autor Corporativo: | |
| Formato: | Electrónico eBook |
| Idioma: | Inglés |
| Publicado: |
Washington, D.C. :
International Monetary Fund,
©2008.
©2008 |
| Colección: | IMF working paper ;
WP/08/195. |
| Temas: | |
| Acceso en línea: | Texto completo |
| Sumario: | 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 (IDP) 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. |
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| Notas: | At head of title: Western Hemisphere Department. "August 2008." |
| Descripción Física: | 1 online resource (25 pages) : illustrations |
| Bibliografía: | Includes bibliographical references (pages 24-25). |
| ISBN: | 1451915063 9781451915068 9781451870534 1451870531 |