In their expansive communiqué on the global financial crisis last weekend, the Group of 20 leaders bemoaned the pro-cylicality of financial regulation caused by lax regulators, inattentive rating agencies and greedy financial institutions. Curiously absent, however, is a candid acknowledgement of politicians’ central contribution to the mix. That is most unfortunate. Finding ways to insulate financial regulation from political meddling is critical to creating a more robust global financial system in the future.
There is a view today that “this time it’s different” for emerging markets. Governments are reducing their dependence on external debt and relying more on domestic debt financing for the first time! Furthermore, emerging market governments are increasingly issuing long-term domestic debt. Indeed, often this change in government debt management patterns is taken as evidence […]