Publication: Global Development Finance 2006 : The Development Potential of Surging Capital Flows, Volume 1. Review, Analysis, and Outlook
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2006
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2006
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Global Development Finance is the World Bank's annual review of global financial conditions facing developing countries. The current volume provides analysis of key trends and prospects, including coverage of capital originating from developing countries themselves. Robust global growth and a favorable financing environment provided the context for a record expansion of private capital flows to developing countries in 2005. Many low-income countries still have little or no access to international private capital, and instead depend largely on official finance from bilateral and multilateral creditors to support their development objectives. Capital flows are changing due to financial integration among developing countries, financial innovations, domestic debt markets, and the global role of the Euro. Net official flows continue to decline as official lending falls and there is more aid and debt relief for the poorest countries. To ensure economic stability, developing countries must manage capital flows with effective macroeconomic policies, prudent accumulation of reserves, careful management of oil-export revenues, and improvements in standards for the corporate sector.
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“World Bank. 2006. Global Development Finance 2006 : The Development Potential of Surging Capital Flows, Volume 1. Review, Analysis, and Outlook. Global development finance. © World Bank. http://hdl.handle.net/10986/8125 License: CC BY 3.0 IGO.”
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Review, Analysis, and Outlook(2007)The globalization of corporate finance also points to other challenges. As emerging-market corporations have expanded their international operations, they have increased their exposure to interest rate and currency risks. Concerns are growing that several countries in emerging Europe and Central Asia are experiencing a credit boom engendered by cross-border borrowing by banks of untested financial health and stamina. Some of these banks have increased their foreign exchange exposure to worrisome levels, a concern that warrants special attention from national policymakers. Given banks' critical role in domestic monetary systems, policymakers should step up their regulation of foreign borrowing by banks. The projected slowdown in global growth and tighter monetary policy in high-income countries are expected to make financing conditions for developing countries somewhat less favorable in coming years. While a soft landing is the most likely outcome, there are risks. Global development finance is the World Bank's annual review of global financial conditions facing developing countries. The current volume provides analysis of key trends and prospects, including coverage of capital raised by developing country based corporations.
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