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The nascent global age at the close of the Middle Ages introduced exotic objects from distant lands into Western Europe. Exotica from the natural world – naturalia – were frequently fashioned into ecclesiastical and seigniorial artifacts and housed in treasuries. The materials were sometimes re-identified in their new contexts, such as narwhal tusks understood as unicorn horns, which bestowed upon them additional meanings associated with those allegorical mythical creatures. This work investigates the movement, alteration, and use of such re-identified naturalia in late medieval society leading up to the Age of Discovery. It focuses on naturalia that retained their distinct morphological features after working, following the hypothesis that the identity of the animal, as indexed by a recognizable form or set of physical characteristics, was important. It additionally considers symbolic connotations and occult properties deriving from allegorization of matter to study the role played by the ornamentation of naturalia. This paper explores the discourse between extant tangible objects and contemporary texts such as bestiaries, lapidaries, and alchemical compendia to examine how the iconography of the artifact’s form and the iconology of the ornamentation contributed to the overall signification of the naturalia. Bibliography Sources MAGNUS, Albertus – On Animals: A Medieval Summa Zoologica. Translated and annotated by Kenneth F. Kitchell Jr. and Irven Michael Resnick. Volume 1. Baltimore and London: The Johns Hopkins University Press, 1999. THEOPHILUS – On Divers Arts. Translated by John Hawthorne and Cyril Stanley Smith. New York: Dover Publications, 1979. Studies AINSWORTH, Thomas – “Form vs. Matter”. The Stanford Encyclopedia of Philosophy [Online]. Spring 2016. ZELTA, Edward N. (Ed.) [Accessed 7 February 2018]. Available at https://plato.stanford.edu/archives/spr2016/entries/form-matter/. BENTON, Janetta Rebold – The Medieval Menagerie: Animals in the Art of the Middle Ages. New York: Abbeville Press, 1992. BOEHM, Barbara Drake; HOLCOMB, Melanie – “Animals in Medieval Art”. in Heilbrunn Timeline of Art History. [Online]. New York: The Metropolitan Museum of Art, 2000-, last edited January 2012. [Accessed 14 March 2018]. Available at http://www.metmuseum.org/toah/hd/best/hd_best.htm. BONNE, Jean-Claude – “De l’ornement dans l’art medieval: VIIe–XIIe siecle; le modele insulaire”. in BASCHET, Jerome; SCHMITT, Jean-Claude (Eds.) – L’image: fonctions et usages des images dans l’Occident medieval; actes du 6e International Workshop on Medieval Societies, Centro Ettore Majorana (Erice, Sicile, 17–23 octobre 1992). Paris: Leopard d’Or, 1996, pp. 207-249. BONNE, Jean-Claude – “Entre l’image et la matiere: la choseite du sacre en Occident”. in SANSTERRE, Jean-Marie; SCHMITT, Jean-Claude (Eds.) – Les images dans les societes medievales: pour une histoire comparee. Bulletin de l’Institut Historique belge de Rome 69 (1999), pp. 77-111. BRITISH MUSEUM – “Animal Remains.” [Online]. [Accessed 14 February 2018]. Available at http://www.britishmuseum.org/research/collection_online/collection_object_details.aspx?objectId=44328&partId=1&people=46119&peoA=46119-1-8&page=1. BUCKLOW, Spike – The Alchemy of Paint: Art, Science, and Secrets from the Middle Ages. London: Marion Boyars, 2009. BUQUET, Thierry – “Animali Extranea et Stupenda ad Videndum: Describing and Naming Exotics Beasts in Cairo Sultan’s Menagerie”. In GARCIA, Francisco de Asis Garcia; VADILLO, Monica Ann Walker; PICAZA, Maria Victoria Chico (Eds.) – Animals and Otherness in the Middle Ages: Perspectives across disciplines. BAR International Series 2500. Oxford: Archaeopress, 2013, pp. 25-34. COLUMBIA UNIVERSITY – “Griffin’s Claw of St. Cuthbert”. [Online]. [Accessed 14 February 2018]. Available at http://www.learn.columbia.edu/treasuresofheaven/relics/Griffins-Claw-of-St-Cuthbert.php. DASTON, Lorraine J.; PARK, Katharine – Wonders and the Order of Nature, 1150-1750. New York: Zone Books, 2001. DUFFIN, Christopher J. – “Fish, Fossil, and Fake: Medicinal Unicorn Horn”. in DUFFIN, Christopher J.; GARDNER-THORPE, C.; MOODY, R.T.J. (Eds.) – Geology and Medicine: Historical Connections. Geological Society of London Special Publications 452. London: The Geological Society of London, 2017, pp. 211-259. EAMON, W. – Science and the Secrets of Nature: Books of Secrets in Medieval and Early Modern Culture. Princeton: Princeton University Press, 1994. ENCYCLOPAEDIA BRITANNICA – “Aurochs”. [Online]. [Accessed 4 April 2018]. Available at https://www.britannica.com/animal/aurochs. ENCYCLOPAEDIA BRITANNICA – “Bison”. [Online]. [Accessed 4 April 2018]. Available at https://www.britannica.com/animal/bison. ENCYCLOPAEDIA BRITANNICA – “Ox”. [Online]. [Accessed 4 April 2018]. Available at https://www.britannica.com/animal/ox-mammal-Bos-taurus. FRICKE, Beate – “Matter and Meaning of Mother-of-Pearl: The Origins of Allegory in the Spheres of Things”. GESTA 51/1 (2012), pp. 35-53. FRIEDMAN, John Block; FIGG, Kristen Mossler (Eds.) – Trade, Travel, and Exploration in the Middles Ages: An Encyclopedia. New York: Garland, 2000. GONTERO-LAUZE, Valerie – Les Pierres du Moyen Age: Anthologie des lapidaires medievaux. Paris: Societe d’edition Les Belles Lettres, 2016. GOTFREDSEN, Lise – The Unicorn. Translated by Anne Born. New York: Abbeville Press, 1999. GREEN, Nile – “Ostrich Eggs and Peacock Feathers: Sacred Objects as Cultural Exchange between Christianity and Islam”. Al-Masaq 18/1 (2006), pp. 27-78. DOI: 10.1080/09503110500222328. GUERIN, Sarah M – “Forgotten Routes? Italy, Ifriqiya and the Trans- Saharan Ivory Trade”. Al-Masaq 25/1 (2013), pp. 70-91. DOI: 10.1080/09503110.2013.767012. HAHN, Cynthia – Strange Beauty: Issues in the Making and Meaning of Reliquaries, 400-circa 1204. University Park: The Pennsylvania State University Press, 2012. HASSIG, Debra – Medieval Bestiaries: Text, Image, Ideology. RES Monographs on Anthropology and Aesthetics. Cambridge: Cambridge University Press, 1995. KENSETH, Joy (Ed.) – The Age of the Marvelous. Hanover: Hood Museum of Art/Darmouth College, 1991. KESSLER, Herbert L. – “The Eloquence of Silver: More on the Allegorization of Matter”. in HECK, Christian (Ed.) – L'alegorie dans l'art du Moyen Age: formes et fonctions; heritages, creations, mutations. Turnhout: Brepols, 2011, pp. 49-64. KINOSHITA, Sharon – “Animals and the Medieval Culture of Empire”. in COHEN, Jeffrey Jerome (Ed.) – Animal, Vegetable, Mineral: Ethics and Objects. Washington DC: Oliphaunt Books, 2012, pp. 35-64. KLINGENDER, Francis D. – Animals in Art and Thought to the End of the Middle Ages. Cambridge: MIT Press, 1971. LAVERS, Chris – The Natural History of Unicorns. London: Granta Books, 2009. LEVENSON, Jay A. (Ed.) – Circa 1492: Art in the Age of Exploration. Washington, New Haven, and London: National Gallery of Art and Yale University Press, 1991. LUGLI, Adalgisa – Naturalia et Mirabilia: Les cabinets de curiosites en Europe. Translated by Marie-Louise Lentengre. Paris: Adam Biro, 1998. MARRACHE-GOURAUD, Myriam – “Les Secrets de la Licorne”. in MONCOND’HUY, Dominique (Ed.) – La Licorne et le Bezoard. Montreuil: Gourcuff Gradenigo, 2013, pp. 396-397. MAXWELL-STUART, P.G. – The Occult in Medieval Europe, 500-1500: A Documentary History. Basingstoke and New York: Palgrave Macmillan, 2005. MONCOND’HUY, Dominique (Ed.) – La Licorne et le Bezoard. Montreuil: Gourcuff Gradenigo, 2013. MUSEE DU LOUVRE – Le tresor de Saint-Denis. Paris: Reunion des musees nationaux, 1991. PLUSKOWSKI, Aleksander – “Narwhals or Unicorns? Exotic Animals as Material Culture in Medieval Europe”. European Journal of Archaeology 7.3 (2004), pp. 291-313. POMIAN, Krzysztof – “La Wunderkammer entre tresor et collection particuliere”. in MONCOND’HUY, Dominique (Ed.) – La Licorne et le Bezoard. Montreuil: Gourcuff Gradenigo, 2013, pp. 17-27. RECHT, Roland – “Introduction”. in LUGLI, Adalgisa – Naturalia et Mirabilia: Les cabinets de curiosites en Europe. Translated by Marie-Louise Lentengre. Paris: Adam Biro, 1998, pp. 23-29. ROBERTSON, Kellie – “Exemplary Rocks”. in COHEN, Jeffrey Jerome (Ed.) – Animal, Vegetable, Mineral: Ethics and Objects. Washington DC: Oliphaunt Books, 2012, pp. 91-122. ROSS, Leslie – Artists of the Middle Ages. Westport and London: Greenwood Press, 2003. RUDWICK, Martin J.S. – The Meaning of Fossils: Episodes in the History of Paleontology. Second Edition. Chicago and London: The University of Chicago Press, 1985. SCHRADER, J. L – “A Medieval Bestiary”. The Metropolitan Museum of Art Bulletin 44/1 (Summer 1986), pp. 1-56. SHEPARD, Odell – The Lore of the Unicorn. London: George Allen & Unwin Ltd., 1967. STRATFORD, Jenny – Richard II and the English Royal Treasure. Woodbridge: The Boydell Press, 2012. WEINRYB, Ittai – “Beyond Representation: Things – Human and Nonhuman”. in MILLER, Peter N. (Ed.) – Cultural Histories of the Material World. Ann Arbor: University of Michigan Press, 2013, pp. 172-186. WEINRYB, Ittai – “Living Matter: Materiality, Maker, and Ornament in the Middle Ages”. Gesta 52 (Fall 2013), pp. 113-132. ZINK, Michael – “Nature in the Medieval World”. in MYERS, Nicole R. (Ed.) – Art and Nature in the Middle Ages. New Haven and London: Dallas Museum of Art and Yale University Press, 2016, pp. 15-26.

ESG investing has been a hot topic during several years and there have been numerousstudies examining the relationship between sustainable assets and non-sustainable assetsincluding green bonds, social bonds, environmental bonds, ESG-bonds and ESG indices;conventional bonds, S&P 500, common stocks and non-ESG indices. During negative marketshocks several ESG stocks and indices have been shown to outperform common stocks andindices. Green bonds demonstrated an asymmetric relationship to other assets providinginvestors with an opportunity for diversification. We’ve looked at the relationship andperformance of sustainable assets and non-sustainable assets by using Markowitz portfoliometrics and Engle Rs’ DCC-GARCH. Our findings propose green bonds and treasuries toprovide hedging and diversification opportunities during crises but demonstrate sustainablefixed income assets to underperform non-sustainable fixed income assets during the COVID19 market shock as opposed to previous studies.

The nascent global age at the close of the Middle Ages introduced exotic objects from distant lands into Western Europe. Exotica from the natural world - naturalia - were frequently fashioned into ecclesiastical and seigniorial artifacts and housed in treasuries. The materials were sometimes re-identified in their new contexts, such as narwhal tusks understood as unicorn horns, which bestowed upon them additional meanings associated with those allegorical mythical creatures. This work investigates the movement, alteration, and use of such re-identified naturalia in late medieval society leading up to the Age of Discovery. It focuses on naturalia that retained their distinct morphological features after working, following the hypothesis that the identity of the animal, as indexed by a recognizable form or set of physical characteristics, was important. It additionally considers symbolic connotations and occult properties deriving from allegorization of matter to study the role played by the ornamentation of naturalia. This paper explores the discourse between extant tangible objects and contemporary texts such as bestiaries, lapidaries, and alchemical compendia to examine how the iconography of the artifact’s form and the iconology of the ornamentation contributed to the overall signification of the naturalia.

The Federal Reserve's "balance-sheet normalization," which reduced aggregate reserves between 2017 and September 2019, increased repo rate distortions, the severity of rate spikes, and intraday payment timing stresses, culminating with a significant disruption in Treasury repo markets in mid-September 2019. We show that repo rates rose above efficient-market levels when the total reserve balances held at the Federal Reserve by the largest repo-active bank holding companies declined and that repo rate spikes are strongly associated with delayed intraday payments of reserves to these large bank holding companies. Intraday payment timing stresses are magnified by early-morning settlement of Treasury security issuances. Substantially higher aggregate levels of reserves than existed in the period leading up to September 2019 would likely have eliminated most or all of these payment timing stresses and repo rate spikes.

After 2005, commodity prices experienced their longest and broadest boom since World War II. Agricultural prices have now come down considerably since their 2011 peak, but are still 40 percent higher in real terms than their 2000 lows. This paper briefly addresses the main arguments on the causes of the agricultural price cycle. It broadens the scope of analysis by focusing on six agricultural commodities, and identifies the relative weights of key quantifiable drivers of their prices. It concludes that increases in real income negatively affect real agricultural prices, as predicted by Engel's Law. Energy prices matter most (not surprisingly, given the energy-intensive nature of agriculture), followed by stock-to-use ratios and, to a lesser extent, exchange rate movements. The cost of capital affects prices only marginally, probably because it not only influences demand, but also evokes a supply response.

Existing work on China's economic influence in Africa refers to Africa in broad terms, thereby generalizing the results to an extent that is unhelpful for policy-makers in a specific country. Moreover, the emphasis is on oil exporters. This paper remedies this by focusing on a single, oil-importing country: Kenya. The paper examines China's economic presence in Kenya and some of the popular myths surrounding Chinese economic activity. The first myth is that Chinese companies do not employ local workers. In fact, 78 percent of full-time and 95 percent of part-time employees in Chinese companies are locals. Second, although China represents a large potential market for local exporters, the study finds that China has a better chance of expanding its exports to Kenya than Kenya does to China based on existing specializations. This may change with recent oil discoveries in Kenya, increasing the space for Kenyan exports to China, as well as from China's shift to a consumption-driven economy which will increase demand for services, a growing strength of Kenya's economy (World Bank Country Economic Memorandum 2016). The paper emphasizes that Kenyan policy makers should be less concerned about bilateral trade imbalances and worry about Kenya's overall trade balance. However, the Standard Gauge Railway and Thika superhighway experiences suggest that Chinese firms offer relatively few technology transfer or supplier opportunities for local firms and academia. Third, the popular focus of Chinese competition is on the impact on well-organized Kenyan producers and not on consumers, thereby underestimating the benefits Kenyan consumer derive from the availability of more affordable Chinese goods. The paper concludes with policy directions for improving export competitiveness and transparency in infrastructure projects, and local content.

The absence of sovereign bond issuances with World Bank guarantee support for almost 15 years and the customized application of the WB guarantee instrument led potential investors in the Ghana bond to ponder the best way to value the instrument. This paper provides guidance on this subject by presenting four ways to assess the value of a World Bank guarantee for debt capital market issues. The methodologies presented are: nominal weighted average yield; rolling nominal weighted average yield; discounted cash flow; and recovery analysis. The paper presents the methodologies by applying them to a fictional bond issuance by the government of Emergistan, a fictional low income country. Background information on the country and bond issuance has been kept to the minimum as the sole purpose of this example is to illustrate the results of each of the methodologies. It should be noted that World Bank guarantees can be structured in a number of ways depending on the issuer’s objectives as well as country and market circumstances. For instance, guarantees could cover interest and/or principal payments of bonds. Coverage could be on a first loss or back-ended basis. Therefore, the most appropriate valuation method would depend on the specific features of the guarantee being considered.

Using the universe of all externally issued bonds by corporates and sovereigns in emerging and developing economies during 2000-14, this paper analyzes various issuance trends, including the unprecedented post-crisis surge. The paper focuses on external issuance at the country-industry and individual bond levels and finds that global factors matter greatly for emerging and developing economies issuance. A decrease in U.S. expected equity market (or interest rate) volatility, U.S. corporate credit spreads, and U.S. interbank funding costs and an increase in the Federal Reserve’s balance sheet (i) raise the odds that the monthly issuance volume of a country-industry is above its historical average; (ii) decrease individual bond yields and spreads; and (iii) raise bond maturities, after controlling for country pull factors, bond characteristics (for example, type of issuer, industry, and riskiness). Additionally, we document support that the risk-taking channel of exchange rate appreciation also operates for external bond issuance. Moreover, while the paper finds that country pull factors affect the impact of global factors, it does not find consistent evidence for this across the board. This result suggests that, during loose global funding conditions, flows are mostly driven by push factors and do not systematically discriminate between emerging and developing economies. Taken together, the findings suggest that although issuers might be able to benefit from benign international funding conditions, the large issuance volumes, currency risks, and high exposure to global factors could pose external and domestic challenges for policy makers, particularly when global cycles reverse.

This background note is intended to assist debt management offices (DMOs) in assessing whether a bond placement scheme combining auctions and syndications is an appropriate strategy in their markets and, if so, to assist them in designing the corresponding procedures.

The explosive growth of green bonds in the capital markets is increasingly attracting attention from investors. This surge in interest has created a demand for accessible information on the green bond market. This primer was created in response to this demand and covers the principles of this relatively new financial instrument. The following intends to serve as a guide for those interested in better understanding the nature of green bonds. The content will aim to distinguish green bonds from other traditional financial instruments. It will also provide insight into the potential of green bonds to mobilize new sources of climate finance. This paper includes the following highlights: understanding bonds (chapter one); understanding green bonds (chapter two); and benefits and potential.

Automation of government financial management (GFM) systems is one of the core elements of the reform program since ready availability of timely and accurate information is critical to the management of government finances and public funds; and it may simply not be possible to obtain the information required for economic management in a timely manner without some degree of automation, in view of the large transaction volumes involved and their dispersal across multiple sites around the country. These systems are also referred to as integrated financial management information systems (IFMIS). As described in this handbook, IFMIS consists of a number of modules which support the different functional processes associated with GFM. These include modules for macroeconomic forecasting, budget preparation, budget execution (including cash management, accounting, and fiscal reporting), managing the size of the civil service establishment and its payroll and pensions, debt management, tax administration, and auditing. This handbook tries to fulfill the need and to provide information related to the entire systems life cycle, including the setting of reform priorities, designing systems functionality and architecture, and during systems implementation and ongoing operation and maintenance. In doing so, the author draws on his experience gained while managing, assisting, and advising on the implementation of World Bank financed projects for the implementation of such systems over the last 30 years in countries of the former Soviet Union, Eastern Europe, the Caribbean, South and East Asia, and Africa. The handbook discusses the policy prerequisites, scope, and functionality of these systems in detail. It describes the steps and issues involved in systems design, procurement, and implementation. This includes project management structures required, the main activities involved in systems implementation, the type of technology architecture that needs to be deployed to implement the systems, and what technology choices need to be made, the main cost drivers and how long can systems implementation be expected to take, and the critical success factors that determine successful outcomes. The handbook also highlights key failure points in the design, implementation, and maintenance of these systems.

An integrated fiduciary assessment has been carried out to evaluate the arrangementsrelevant to the Bihar Teachers Education Program to determine whether they provide reasonableassurance that the Program funds will be used for their intended purpose. Based on theassessment and agreement on actions required to strengthen the system, which are reflected inthe DLIs and PAP the overall fiduciary framework for program are considered adequate tosupport program management and to reach the desired results. Similar to other states in India, the GoB has a well-developed budgetary framework that ensures allocation of adequate resources to departments and programs. GoB has not faced significant fund constraint and there is sufficient predictability in availability of resources, albeit fund releases tend to be significantly higher in the last quarter of the financial year; As per standard practice and in order to maintain transparency in GoBs financing, two exclusive budget lines have been allocated to this program segregating between revenue and capital expenditures; a significant proportion of the activities i.e. civil works, ICT procurement and key consultancies, under the program will be undertaken by BSEIDC which operates outside the treasury system and uses commercial banking channels for financial flows and payments. Fiduciary framework in the state and consequently the Program, are guided by several rules and legislation including the Bihar Financial Rules, Treasury Code and Budget Manual, PWD Manual and the Companies Act (2013) in case of BSEIDC.

Análisis del sistema de financiación local español con propuestas concretas para su reforma, Escuela de Administración Pública de Castilla y León

Este artículo profundiza en el proceso desarrollado durante la España del XVIII para tratar de conseguir un aparato administrativo más centralizado, mejor informado y con mayor capacidad de intervención en la gestión de los recursos fiscales de la Monarquía. Se valora, en una primera parte, el sentido de una institución como es la Tesorería General y especialmente su interrelación con las distintas Tesorerías de Ejército provinciales. Definido el marco de análisis, se aproxima al análisis específico de la Tesorería de de Ejército de Galicia durante el período 1765-1780: ordenación administrativo-contable, caudal obtenido por las rentas situadas a su cargo y su uso; todo ello durante un período cronológico, exento inicialmente de conflictos bélicos, que permite examinar la eficacia de un modelo administrativo consolidado y su reacción última ante la movilización de recursos financieros ordenada para la guerra contra Inglaterra. Las conclusiones nos hablan de congelación y escasa flexibilidad presupuestaria, combinada con un descenso del cargo por rentas reales paralelo al aumento de las funciones de intermediación financiera.

In 2011, India's economic growth has slowed to below 7 percent and the stock markets mirrored the weakening economic conditions, but recovered somewhat in early 2012. Industrial sector output growth briefly slipped into negative territory. On the demand side, fixed investment and consumption growth slowed. India's exports were growing very strongly through 2011 despite the worsening economic conditions in Europe, which continued to be India's most important export market. The balance of payments continued to be in surplus during April-September 2011, but the Reserve Bank of India (RBI) reserves declined by a small amount since then. The rupee nevertheless depreciated by 20 percent between August and December, before recovering somewhat in early 2012. Macroeconomic policies presented a mixed picture: the central government is likely to miss the ambitious target for fiscal consolidation it had set in the FY2011-12 budget by about one percent of Gross Domestic Product (GDP). Slippages are due to lower-than-expected revenues and increasing outlays on subsidies, which had been given low budgetary allocations in anticipation of strong policy changes, which failed to materialize. In India, the slowdown in GDP growth witnessed over the last two quarters is likely to extend into the coming fiscal year because of the weakness in investment. In FY2011-12 and FY2012-13, GDP growth is forecast to reach around 7-7.5 percent, a significant slowdown from the 9-10 percent growth in the run-up to the global financial crisis. The slowdown is at least partly caused by structural problems (power projects facing delays due to the lack of coal and gas feedstock, mining and the telecom sectors hit by corruption scandals, unavailability of land and infrastructure).

The paper is based on a scenario workshop held on January 20, 2009, where leading financial and private sector development experts from IFC, the International Monetary Fund, and the World Bank discussed the unfolding crisis. This paper is a product of the staff of the Financial and Private Sector Development Vice Presidency of the World Bank Group. The scenarios described in this paper do not necessarily reflect the views of the World Bank Group, its Executive Directors, or the governments they represent. The scenarios described serve as the basis of a planning exercise and are not to be interpreted as forecasts or projections on the part of the World Bank Group or the authors of this paper. The purpose of this paper is to sketch scenarios taking into account the information currently at hand. In this way, scenarios can provide decision makers with alternative views of the future. Decision makers can test their strategies against the different ways in which the future might play out. Scenarios provide a framework for debate, leading to better policy making and strategies. They are especially useful in situations where major global changes are under way but there is huge uncertainty over what may happen. Staffs of the World Bank Group are providing these scenarios to help governments and organizations prepare for an uncertain future. Being well prepared and open to thinking about different outcomes is much better than continually being behind the curve and having to chase events.

Detailed Assessment of Observance This assessment is focused on the Superintendencia de Seguros de la Nacion (SSN) in Argentina. SSN has responsibility for regulation and supervision of all players in the insurance market. In addition to its role as a supervisor, SSN has powers to issue regulations, is responsible for advising the executive on issues related to insurance, and can propose draft bills. The laws are passed by the national legislative branch and enacted by the national executive branch. The assessment was performed using the 2007 version of the core principles for insurance supervision issued by the International Association of Insurance Supervisors (IAIS). This paper is structured into following four parts: part one is information and methodology used for the assessment; part two is institutional and macro prudential setting, part three gives summary assessment; and part four gives authorities' responses.

The Indonesia economic quarterly reports on and synthesizes the past three months' key developments in Indonesia's economy. It places them in a longer-term and global context, and assesses the implications of these developments and other changes in policy for the outlook for Indonesia's economic and social welfare. Its coverage ranges from the macro economy to financial markets to indicators of human welfare and development. It is intended for a wide audience, including policy makers, business leaders, financial market participants, and the community of analysts and professionals engaged in Indonesia's evolving economy. Economic developments over the past quarter bear some strong similarities with the situation seen in the first half of 2008. Most notably, rises in domestic and international commodity prices have again brought with them a variety of risks, both positive and negative, at the macroeconomic and household level. While oil prices increased sharply with political developments in the Middle East and North Africa, strong price rises have been seen across global commodities. Non-energy commodities, including food, were up 30 percent in the six months to February 2011, similar to the increases seen in the first half of 2008. The experiences of other countries through the 2008 food price crisis suggest a range of potential policies which can provide well-targeted protection for vulnerable households and maintain and create incentives for producers to help limit future price volatility.

The Indian economy recovered from the slowdown at the time of the global financial crisis with strong Gross Domestic Product (GDP) growth, in particular over the first half of FY2010-11. The agricultural sector bounced back strongly after the 2010 monsoon brought normal levels of rainfall, and the industrial sector registered double-digit growth for three consecutive quarters. Inflation came down to 7.5 percent in November but then accelerated again to 8.4 percent in December because of a renewed food supply shock. The current account deficit in FY2009-10 was the largest ever (in US$ terms) and the monthly deficit widened further during the first half of FY2010-11, but the trend then reversed with import growth slowing and export growth accelerating in September-December 2010. With the significant inflation differential between India and its trading partners, the rupees real effective exchange rate (REER) strengthened. On the fiscal side, massive windfall revenue from wireless spectrum auctions and buoyant tax revenue are likely to be offset by two supplementary spending bills. Monetary policy tightening continued with increases in policy rates. This update also discusses several medium-term issues: the link between the real exchange rate and growth, a long-term look at education, demographics and growth, the challenges facing the introduction of the Goods and Services Tax (GST), and the mid-term evaluation of the eleventh development plan. On the real exchange rate, economists have pointed out that the most successful emerging market economies have maintained an undervalued exchange rate to promote exports. In India, the real exchange rate has been broadly stable since the early 1990s, and the International Monetary Fund (IMF) judges it fairly valued with respect to different measures of equilibrium. However, the growing trade deficit and a large fiscal deficit do not quite fit this picture. Discussing policies, we argue that it would be best to focus on policies that increase productivity and competitiveness.

The Indonesian economic quarterly reports on and synthesizes the past three months' key developments in Indonesia's economy. Its coverage ranges from the macro economy to financial markets to indicators of human welfare and development. It is intended for a wide audience, including policy makers, business leaders, and financial market participants, and the community of analysts and professionals engaged in Indonesia's evolving economy. The challenge for Indonesia is to maximize the opportunities that this brings, in terms of enhancing future growth and making investments that can improve the welfare of the entire population, while managing the associated risks. Strong capital inflows, particularly portfolio, have been seen across emerging markets, including Indonesia. These inflows are driven by yield differentials and the stronger growth prospects, and improved creditworthiness, of emerging economies relative to heavily indebted, higher-income economies. Further quantitative easing in the US has provided an additional, cyclical boost to this trend. Global commodity prices also picked up in recent months. In November, the US dollar price of non-energy commodities rose by 3.4 percent over the month with food and raw material prices up by 4.9 percent and 7.6 percent, respectively. The underlying drivers were strong growth in demand from emerging economies, particularly China, and also supply disruptions in the agriculture sector.

This edition of the Middle East and North Africa (MENA) regional economic update shows that recovery in the region is below historical trends. Its economic prospects depend on global developments and continued strengths in emerging-market demand and oil price trends. Growth in the region is expected to average 4% in 2010, an increase of slightly less than 2 percentage points (pp) over growth in 2009 and weak compared to increases of 5.6pp in advanced economies and 4.5pp in developing nations. Only by 2011 and 2012 is MENA s growth expected to return to the average rates achieved prior to the economic and financial crisis. Recovery has been driven by the global economic rebound and, to varying degrees, by domestic stimulus. Industrial production, which in MENA is dominated by oil, has nearly reached its pre-crisis peak, largely due to the strong recovery in emerging markets, especially Asia. However, the upturn has weakened in recent months because the global slowdown has arrived sooner and is occurring faster than previously anticipated, and there are serious concerns about the sustainability of the global recovery. In response, MENA governments have continued to stimulate their economies in 2010, and even those that did not use any type of fiscal stimulus in 2009 have started implementing fiscal measures in 2010. The economic recovery in MENA has been much less vigorous than the recovery in countries that suffered sharp output contractions. The sustainability of the recovery in Gulf Cooperation Council (GCC) economies depends on developments in the rest of the world, and on the extent to which they affect oil markets. The outlook for the global economy and oil markets in the second half of 2010 remains uncertain, and a decline in oil prices cannot be ruled out.

The improvement in public finances since last year, coupled with buoyant revenue due to the commodity price recovery, has led to growing pressures for increased government spending. Recently approved budget amendments envisage a 4.5 percent of gross domestic product (GDP) increase in spending on the originally approved 2010 budget, while the Mid-Term Budget Framework (MTBF) for 2011-2013 projects another 12.1 percent of GDP increase in spending in 2011. The main driver for the increases is the execution of promises made by both coalition parties to distribute monthly percentage rate, or MNT 1.5million (around US$1000) to each citizen in the form of cash and non-cash handouts and large public sector wage increases planned for October of this year. If these public spending plans materialize, they will set the stage for a renewed bout of high inflation and a possible return to the macroeconomic vulnerability characteristic of the boom-and-bust cycle of the recent past. In the real sector, the impact of increasing inflation is evidenced through a decline in real wages. The latest informal wage survey indicates that on average, workers' nominal wages have increased by about 10 percent from January 2010 to June 2010; this is because of an increase in job opportunities in the construction sector. Real wages, however, have declined on average due to the significant increase in the consumer price index.

Amid heightened global uncertainties, Russia is experiencing a bumpy recovery. Domestic demand is rising, but unemployment remains high, and credit and investment remain limited. The budget has benefited from higher oil prices, but fiscal consolidation remains important in the medium term. Crumbling infrastructure, especially in transport, could hamper the economy's competitiveness and longer-term growth prospects. The debt crisis in Western Europe sharpens the downside risks to global recovery and oil prices. But the effects on Russia are likely to be blunted by its stronger fiscal and debt positions and by limited trade and financial links with the affected countries. Russia is likely to grow by 4.5 percent in 2010, followed by 4.8 percent in 2011, as domestic demand expands in line with gradual improvements in the labor and credit markets. Employment is expected to improve gradually, however, enabling some further reductions in poverty.

This edition of the Middle East and North Africa (MENA) regional economic update concerns the region recovering from the financial crisis along with the global economy. Growth in 2010 is expected to be 4.4 percent region-wide, driven by domestic absorption as well as a positive contribution from external demand. The recovery from the crisis differs by country depending on initial conditions and the intensity of the impact via the three principal channels through which the global financial crisis affected MENA economies-the financial sector, the price of oil, and the balance of payments, reflecting the impact on trade, remittances and Foreign Direct Investment (FDI) flows. The Gulf Cooperation Council (GCC) countries are leading the regional recovery as oil prices have rebounded and the GCC financial sector is stabilizing. Developing oil exporters felt the impact of the crisis, and now the recovery, largely through the oil price channel, due to the limited integration of their banking sectors into global financial markets and the importance of oil in their exports. The oil importers were affected by the crisis through the secondary effects on trade, remittances, and FDI flows, so their recovery will depend crucially on the recovery in key markets, especially the EU and the GCC countries. High unemployment has been a problem in MENA for years, and the crisis has dimmed prospects for improvements in the near term. Ample oil and gas resources, a youthful and growing workforce, and a growing momentum to look for ways to diversify their economies imply that the growth potential of the region is high, but MENA countries continue to face formidable longer term challenges. Ensuring access to finance without compromising financial stability will be a major challenge in MENA, although issues related to weak regulatory systems, corporate governance and overdependence on the banking system also loom large. Key problems of the business environment in MENA include policy and regulatory uncertainty and discretion in implementing reforms which prevent a level playing field for all firms and encourage the pursuit of privileged access. These problems, coupled with barriers to entry and exit, have created an environment of stagnation. Addressing these issues will require applying rules and regulations consistently and without discrimination among firms and introducing reforms that promote business dynamism, private investment, and innovation.

Repo markets are an essential component of liquid Government debt markets, acting as a transmission belt between money and debt markets, as well as serving to conduct key functions for the efficient operation of debt markets. These include, among others, credit risk management, funding debt portfolios, playing the yield curve, and covering short positions and settlement fails. The hybrid nature of a repo between a collateralized loan and a full transfer of ownership makes it a very versatile instrument for a broad range of market participants with very different business models. However, this is at the same time the reason for its complexity. This note addresses the legal, structural, accounting, tax, regulatory and infrastructure factors that are decisive for repo market development. The legal and infrastructure factors that underpin repo markets functionality are evolving ones and may be different depending on the country. The perspective adopted in this note intends to provide a balanced account of both the conceptual issues in each topic and relevant country cases, with the objective of providing policy makers with analytical tools to address their country specific context.

Contingent liabilities create management problems for governments. They have a cost, but judging what the cost is and whether it is worth incurring is difficult. Except in the case of contingent liabilities created by simple guarantees of debt, governments usually can incur contingent liabilities without budgetary approval or recognition in the governments accounts. So governments may prefer contingent liabilities to other obligations. (The uncertainty surrounding contingent liabilities can work differently. It is well known that PPPs create contingent liabilities, and the International Monetary Fund (IMF), the World Bank, and others often warn of the risks. The initial reaction of a cautious Ministry of Finance may be to seek to avoid all contingent liabilities.) Management problems also arise once a government has incurred a contingent liability. Projects need to be monitored to reduce risks if possible. Spending on contingent liabilities must sometimes be forecast, despite the difficulty.

The Indonesian economic quarterly reports on and synthesizes the past three month s key developments in Indonesia s economy. It places them in a longer-term and global context, and assesses their implications for the outlook for Indonesia s economic and social welfare. Its coverage ranges from the macro economy to financial markets to indicators of human welfare and development. Indonesia s economy appears to be broadly backed on track. Economic activity has been picking up, inflation has remained moderate, financial markets have risen, and the newly reelected government, having established the strong fundamentals that supported Indonesia through the global crisis, appears to be now gearing up for new investments in Indonesia s physical infrastructure, human services and institutions of state. Indonesia seems well-positioned to get back on its pre-crisis growth trajectory, with the possibility of further acceleration and more inclusive growth. The sustainability of the global recovery is still not entirely clear and portfolio flows into emerging markets, which have surged in the last nine months, may as easily be reversed as policy makers elsewhere move to unwind the large monetary and fiscal stimulus efforts initiated over the last year.

Thesis (Ph.D. (Applied Mathematics))--North-West University, Potchefstroom Campus, 2010. Subprime residential mortgage loan securitization and its associated risks have been a major topic of discussion since the onset of the subprime mortgage crisis (SMC) in 2007. In this regard, the thesis addresses the issues of subprime residential mortgage loan (RML) securitization in discrete-, continuous-and discontinuous-time and their connections with the SMC. In this regard, the main issues to be addressed are discussed in Chapters 2, 3 and 4. In Chapter 2, we investigate the risk allocation choices of an investing bank (IB) that has to decide between risky securitized subprime RMLs and riskless Treasuries. This issue is discussed in a discrete-time framework with IB being considered to be regret- and risk-averse before and during the SMC, respectively. We conclude that if IB takes regret into account it will be exposed to higher risk when the difference between the expected returns on securitized subprime RMLs and Treasuries is small. However, there is low risk exposure when this difference is high. Furthermore, we assess how regret can influence IB's view - as a swap protection buyer - of the rate of return on credit default swaps (CDSs), as measured by the premium based on default swap spreads. We find that before the SMC, regret increases IB's willingness to pay lower premiums for CDSs when its securitized RML portfolio is considered to be safe. On the other hand, both risk- and regret-averse IBs pay the same CDS premium when their securitized RML portfolio is considered to be risky. Chapter 3 solves a stochastic optimal credit default insurance problem in continuous-time that has the cash outflow rate for satisfying depositor obligations, the investment in securitized loans and credit default insurance as controls. As far as the latter is concerned, we compute the credit default swap premium and accrued premium by considering the credit rating of the securitized mortgage loans. In Chapter 4, we consider a problem of IB investment in subprime residential mortgage-backed securities (RMBSs) and Treasuries in discontinuous-time. In order to accomplish this, we develop a Levy process-based model of jump diffusion-type for IB's investment in subprime RMBSs and Treasuries. This model incorporates subprime RMBS losses which can be associated with credit risk. Furthermore, we use variance to measure such risk, and assume that the risk is bounded by a certain constraint. We are now able to set-up a mean-variance optimization problem for IB's investment which determines the optimal proportion of funds that needs to be invested in subprime RMBSs and Treasuries subject to credit risk measured by the variance of IE's investment. In the sequel, we also consider a mean swaps-at-risk (SaR) optimization problem for IB's investment which determines the optimal portfolio which consists of subprime RMBSs and Treasuries subject to the protection by CDSs required against the possible losses. In this regard, we define SaR as indicative to IB on how much protection from swap protection seller it must have in order to cover the losses that might occur from credit events. Moreover, SaR is expressed in terms of Value-at-Risk (VaR). Finally, Chapter 5 provides an analysis of discrete-, continuous- and discontinuous-time models for subprime RML securitization discussed in the aforementioned chapters and their connections with the SMC. The work presented in this thesis is based on 7 peer-reviewed international journal articles (see [25], [44], [45], [46], [47], [48] and [55]), 4 peer-reviewed chapters in books (see [42], [50j, [51J and [52]) and 2 peer-reviewed conference proceedings papers (see [11] and [12]). Moreover, the article [49] is currently being prepared for submission to an lSI accredited journal. Masters

Subprime residential mortgage loan securitization and its associated risks have been a major topic of discussion since the onset of the subprime mortgage crisis (SMC) in 2007. In this regard, the thesis addresses the issues of subprime residential mortgage loan (RML) securitization in discrete-, continuous-and discontinuous-time and their connections with the SMC. In this regard, the main issues to be addressed are discussed in Chapters 2, 3 and 4. In Chapter 2, we investigate the risk allocation choices of an investing bank (IB) that has to decide between risky securitized subprime RMLs and riskless Treasuries. This issue is discussed in a discrete-time framework with IB being considered to be regret- and risk-averse before and during the SMC, respectively. We conclude that if IB takes regret into account it will be exposed to higher risk when the difference between the expected returns on securitized subprime RMLs and Treasuries is small. However, there is low risk exposure when this difference is high. Furthermore, we assess how regret can influence IB's view - as a swap protection buyer - of the rate of return on credit default swaps (CDSs), as measured by the premium based on default swap spreads. We find that before the SMC, regret increases IB's willingness to pay lower premiums for CDSs when its securitized RML portfolio is considered to be safe. On the other hand, both risk- and regret-averse IBs pay the same CDS premium when their securitized RML portfolio is considered to be risky. Chapter 3 solves a stochastic optimal credit default insurance problem in continuous-time that has the cash outflow rate for satisfying depositor obligations, the investment in securitized loans and credit default insurance as controls. As far as the latter is concerned, we compute the credit default swap premium and accrued premium by considering the credit rating of the securitized mortgage loans. In Chapter 4, we consider a problem of IB investment in subprime residential mortgage-backed securities (RMBSs) and Treasuries in discontinuous-time. In order to accomplish this, we develop a Levy process-based model of jump diffusion-type for IB's investment in subprime RMBSs and Treasuries. This model incorporates subprime RMBS losses which can be associated with credit risk. Furthermore, we use variance to measure such risk, and assume that the risk is bounded by a certain constraint. We are now able to set-up a mean-variance optimization problem for IB's investment which determines the optimal proportion of funds that needs to be invested in subprime RMBSs and Treasuries subject to credit risk measured by the variance of IE's investment. In the sequel, we also consider a mean swaps-at-risk (SaR) optimization problem for IB's investment which determines the optimal portfolio which consists of subprime RMBSs and Treasuries subject to the protection by CDSs required against the possible losses. In this regard, we define SaR as indicative to IB on how much protection from swap protection seller it must have in order to cover the losses that might occur from credit events. Moreover, SaR is expressed in terms of Value-at-Risk (VaR). Finally, Chapter 5 provides an analysis of discrete-, continuous- and discontinuous-time models for subprime RML securitization discussed in the aforementioned chapters and their connections with the SMC. The work presented in this thesis is based on 7 peer-reviewed international journal articles (see [25], [44], [45], [46], [47], [48] and [55]), 4 peer-reviewed chapters in books (see [42], [50j, [51J and [52]) and 2 peer-reviewed conference proceedings papers (see [11] and [12]). Moreover, the article [49] is currently being prepared for submission to an lSI accredited journal. Thesis (Ph.D. (Applied Mathematics))--North-West University, Potchefstroom Campus, 2010.