Banking On the Go
By IMFBlog
June 23, 2017
Tayo Oviosu at IMF lecture (photo: Ryan Rayburn/IMF staff)
Worldwide, more than two billion people are without bank accounts, and only one in three adults in sub-Saharan Africa has access to any type of financial services. In this podcast, Tayo Oviosu, founder and CEO of Nigeria's leading mobile payment platform, Paga, reveals how his company is rapidly bringing millions of unbanked Nigerians into the banking fold. (more…)
Fintech: Capturing the Benefits, Avoiding the Risks
June 20, 2017
Versions in عربي (Arabic), 中文 (Chinese), and Español (Spanish), Français (French) 日本語 (Japanese), Русский (Russian)
A signboard at a store in Guangzhou, China, lists various forms of mobile payment (photo: Imagine China/Newscom)
When you send an email, it takes one click of the mouse to deliver a message next door or across the planet. Gone are the days of special airmail stationery and colorful stamps to send letters abroad.
International payments are different. Destination still matters. You might use cash to pay for a cup of tea at a local shop, but not to order tea leaves from distant Sri Lanka. Depending on the carrier, the tea leaves might arrive before the seller can access the payment. (more…)
Chart of the Week: A Storm by Any Other Name
By IMFBlog
June 19, 2017
Women look at destruction after Hurricane Matthew struck Haiti ( photo: Patrick Farrell/Miami Herald/TNS)
Hurricane season officially began June 1, and we can expect a busy season of damaging storms in the Atlantic, according to the National Oceanic and Atmospheric Administration’s outlook.
Hurricanes are the leading cause of natural disasters in the Caribbean, making the region one of the most vulnerable in the world. Yet, only 62 percent of disasters caused by hurricanes have recorded data on economic damages, as the information is difficult to collect. (more…)
Two to Tango—Inflation Management in Unusual Times
By Vitor Gaspar, Maurice Obstfeld, and Chang Yong Rhee
June 15, 2017
Versions in 中文 (Chinese), 日本語 (Japanese)
Shinjuku shopping district, Tokyo, Japan. Strong coordination between monetary and fiscal policies can help Japan tackle its low inflation (photo: Nikada/iStock/Getty Images)
Monetary and fiscal policies interact in complex ways. Yet modern institutional arrangements typically feature a strict separation of responsibilities. For example, the central bank targets inflation and smooths business cycle fluctuations, while the fiscal authority agrees to respect its budget constraint and to support financial stability by maintaining the safe asset status of its debt. This gives governments the freedom to pursue a multiplicity of economic and social objectives (in IMF parlance, inclusive growth).
Chart of the Week: FDI in Financial Centers
By IMFBlog
June 13, 2017
International financial flows have declined significantly after the crisis, and their composition has changed. As portfolio and other investment flows took a dip between 2007 and 2015, foreign direct investment (FDI) continued to surge. The increase is concentrated in financial centers, which now account for almost half of global FDI claims.
The Compact with Africa—The Contribution of the IMF
June 12, 2017
Versions in عربي (Arabic), 中文 (Chinese), Deutsch (German), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)
IMF Managing Director Christine Lagarde on a visit to Nigeria in 2016 (photo: IMF staff/Steve Jaffe)
Some of the world’s top policymakers and investors are gathering in Berlin to discuss a new initiative that could help reshape Africa’s economic future.
Millions of citizens could see tangible economic benefits from the recently launched Group of Twenty advanced and emerging economies' initiative, known as the “Compact with Africa.” The goal is to boost private investment by harnessing the expertise and resources of governments, investors, and international organizations.
The Compact is about facilitating projects that can lift productivity and living standards. It is about creating fresh opportunities on a continent where 70 percent of the population is under 35 years of age.
Lagarde—Lending an Ear to Young Voices
By IMFBlog
June 9, 2017
As Managing Director of the IMF, Christine Lagarde travels the world engaging with country officials, civil society, nongovernmental organizations, and media representatives. Lagarde also makes a point to engage with women and youth groups, to listen to their concerns, and to discuss their vision for their countries.
Why Talk of Bank Capital ‘Floors’ Is Raising the Roof
By Tobias Adrian and Aditya Narain
June 8, 2017
The headquarters of the Bank for International Settlements in Basel, Switzerland, which houses the Basel Committee on Banking Supervision (photo: Christian Hartmann/Reuters/Newscom)
Calculating how much capital banks should have is often a bone of contention between regulators and banks. While there has been considerable progress on reaching consensus on an international standard, one key issue remains unresolved. This is a proposal to establish a “floor,” or minimum, for the level of capital the largest banks must maintain.
Some financial institutions and national authorities question the need for a “floor,’’ arguing either that differences in business models or other elements of the global regulatory framework—notably limits on the amount of leverage banks may take on—make them redundant. We disagree. The floor reduces the chances that banks can game the system to reduce their capital buffers to levels that aren’t aligned with their risks. It is an essential element of global efforts to create a level playing field for banks operating across countries by strengthening common standards for regulation, supervision and risk management.
Protecting Education and Health Spending in Low-Income Countries
June 6, 2017
Versions in عربي (Arabic), 中文 (Chinese), Français (French) 日本語 (Japanese), Русский (Russian), and Español (Spanish)
Senior class in Nairobi, Kenya. In many countries with IMF-supported programs public spending on education grew significantly faster than the economy of the country (photo: Xinhua/Sipa USA/Newscom)
IMF-supported programs are designed to help economies get back on their feet, but what about their impact on social spending?
Our latest research shows that health and education spending have typically been protected in low-income country programs. In fact, an analysis of more than 25 years of data (1988–2014) suggests that public health spending, as a share of GDP, has on average remained unchanged, while public education spending has increased by 0.32 percentage points.
