March 2017

23Mar

Beyond the Privatisation and Re-Nationalisation of the Argentine Pension System: Coverage, Fragmentation, and Sustainability

By Fabio Bertranou & Luis Casanova (International Labour Organization);  Oscar Cetrángolo & Carlos Grushka (University of Buenos Aires) In the last decades, the pension system in Argentina has experienced important changes that included the introduction of an individual account defined-contribution component (or individual capitalisation) in 1994 and its subsequent reversal to a defined benefit pay-as-you-go pension scheme in 2008. After the 2001 crisis, the favourable fiscal position allowed the implementation of policies that reversed the decline in pension coverage to unprecedented...

March 23, 2017
Articles, Corporate Governance, Regulation, System Sustainability, , , ,
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13Mar

Is There a Positive Incentive Effect from Privatizing Social Security: Evidence from Latin America

By Truman G. Packard (World Bank) There is increasing concern among policymakers that social security reforms that involve a transition to individual retirement savings accounts may exclude certain groups of workers from coverage against the risk of poverty in old age. While most public pay-as-you-go systems pool the risk of interrupted careers and periods of low earnings over the covered population, the reformed systems shift the burden of these risks to the individual. Adequate coverage under a system of individual...

March 13, 2017
Articles, Labor Market, Regulation, , ,
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08Mar

Embedded Flaws of the Bulgarian Pension Funds or the Code Against the Insured

The Bulgarian pay-as-you-go publicly managed pension system is complemented by default and voluntary defined contribution pension funds, managed privately. The regulatory regime of the private pension funds is such that turns them into: unsuitable, uncompetitive and ineffective pension products. Privately managed pension funds are unsuitable, because they are not aligned with the investment horizon and the risk tolerance of individual investors. They are uncompetitive since their track record is of delivering below market returns for above market fees and charges....

March 8, 2017
Articles, Pension design, Regulation,
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08Mar

Financial Inclusion and Consumer Protection in Peru

As part of its Global Policy Initiative, CGAP partnered with the Superintendence of Banks, Insurance and AFPs of Peru in late 2008, with the purpose of enhancing the understanding of the issues and trends in consumer relations when financial services are delivered through branchless banking, particularly through agents, which are used in ever increasing scale in Peru. The product was this joint report. The Superintendence and CGAP coordinated closely on data and information gathering, as well as on writing this...

March 8, 2017
Articles, Corporate Governance, Regulation, System Sustainability, ,
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February 2017

04Feb

The Political Economy of Underfunded Municipal Pension Plans

By Jeffrey Brinkman, Daniele Coen-Pirani & Holger Sieg This paper analyzes the determinants of underfunding of local government's pension funds using a politico-economic overlapping generations model. We show that a binding downpayment constraint in the housing market dampens capitalization of future taxes into current land prices. Thus, a local government's pension funding policy matters for land prices and the utility of young households. Underfunding arises in equilibrium if the pension funding policy is set by the old generation. Young households...

February 4, 2017
Articles, Corporate Governance, System Sustainability,
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04Feb

Private pension funds in Poland

By Lech Keller-Krawczyk This article takes a highly critical look at the pension system in Poland, which had been reformed after 1989 on the basis of the World Bank's 'three pillars' model of a combined state and private, mandatory and voluntary pensions system, despite evidence that the model is flawed and unobjective, being hinged on the inducements of cheaper credits for those countries adopting it. The author relates both the old and new pension systems in Poland, and describes the...

February 4, 2017
Articles, Corporate Governance, Investing, Labor Market,
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04Feb

Analysing the Performance of the Pension Fund Industry with a Stochastic Frontier Model: A Case Study for Portugal

The enhanced role of occupational and personal pension plans in providing retirement income raises issues concerning efficiency and performance. This paper evaluates the performance of Portuguese pension fund management companies from 1994 to 2003, using a Cobb-Douglas stochastic cost frontier model to generate their efficiency scores. We conclude that the price of labour, the price of capital-management services and the price of capital-premises, as well as profits, the number of participants, the number of closed funds and the decision...

February 4, 2017
Articles, Corporate Governance, Investing
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04Feb

Changes in Funding Patterns by Latin American Banking Systems: How Large? How Risky? – Working Paper 420

By Liliana Rojas-Suarez & José María Serena This paper investigates the shifts in Latin American banks’ funding patterns in the post-global financial crisis period. To this end, we introduce a new measure of exposure of local banking systems to international debt markets that we term: International Debt Issuances by Locally Supervised Institutions. In contrast to well-known BIS measures, our new metric includes all entities that fall under the supervisory purview of the local authority. This is especially important in Latin...

February 4, 2017
Articles, Investing, ,
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04Feb

Can International Capital Standards Strengthen Banks in Emerging Markets?

By Liliana Rojas-Suarez Who should determine banks’ capital standards: authorities or markets? What is the right definition of core capital: equity only or equity plus subordinated debt? Can the assessment of banks' individual credit risks by external rating agencies be of equal or better quality than the assessments derived from banks' own internal rating systems? These are some of the key financial regulatory issues currently being discussed by analysts in industrial countries, especially in the context of the proposed modification...

February 4, 2017
Adequacy, Articles, Investing
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