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IL&FS crisis may sound death knell for PPP

The default crisis that has struck IL&FS (largest Indian shadow banks), flagbearer of the public-private partnership (PPP) programme, may be the last straw for this once-promising avenue of infrastructureNSE -3.24 % development, experts and executives said, adding that the government will have to take over that role once more. The private sector’s enthusiasm for investment in infrastructure has in any case been waning for some time now, they said.

Bank Indonesia Governor has asserted that private infrastructure financing could boost growth to 6.5%

Bank Indonesia Governor Perry Warjiyo has asserted that private infrastructure financing could boost growth to 6.5%. “‘If infrastructure financing is sourced from private companies, foreign capital will enter,’ he added. ‘This is [part of] the BI and OJK’s [Financial Services Authority] concrete steps toward narrowing the current account deficit, while at the same time, boosting growth in the medium and long terms,’ said Perry.”

The Brookings Institution is advocating for better methodologies to use public resources to “mobilize” private finance

The Brookings Institution, a banking and corporate-dominated think tank in Washington, DC, is advocating for better methodologies to use public resources to “mobilize” private finance for international development. “Already approved by the [U.S.] House and pending before the Senate is legislation to create a new U.S. development finance institution—the Better Utilization of Investments Leading to Development (BUILD) Act of 2018. At its core, the BUILD Act will combine OPIC and some development finance work at USAID and add new authorities and higher contingent liability to allow the U.S. to more effectively tap into private resources to further U.S. development goals.”

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Investment banking: linkages to the real economy and the financial system (By Kushal Balluck of the Bank’s Banking and Insurance Analysis Division)

Investment banks play a key role in capital markets and contribute to the efficient functioning of financial markets. As demonstrated in the recent financial crisis, however, investment banks can create and propagate risks in the financial system given their scale, as well as the interconnected and complex nature of their activities. Recognising investment banks’ systemic importance, a number of international regulatory initiatives have come into force since the onset of the recent financial crisis. The first section of this article provides a summary of the services provided by investment banks. No prior knowledge of this type of financial institution is assumed. The second section then explains conceptually how the various functions of investment banks can serve the real economy through a number of channels, including via the financial system.

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The economics of the Cascade Approach: A critical introduction to Tito Cordella. Daniela Gabor (UWE Bristol)

Daniela Gabor (UWE Bristol). The story: the paper models the conditions under which the cascade approach sequencing is optimal. The cascade sequencing is: Reforms (liberalisation), Subsidies/guarantees (de-risking) and Public solution (RSP). The model accepts that the MFD approach to crowding in private finance creates trade-offs. These trade-offs may require different sequencings: subsidies first, or public solution first.

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CSOs as equal partners in monitoring public finance

CSOs as equal partners in monitoring public finance started from 2016 with the aim to improve accountability and transparency of the public finance in targeted countries and strengthen Civil Society Organisations’ (CSOs) role and voice in monitoring the institutions’ performance in that area. Key project activities are research and monitoring, advocacy, capacity building and transfer of knowledge/practices and networking in the field of the 4 specific topics: • public debt, • public-private partnerships, • tax equity and • infrastructure projects. More about the project and our work can be found here: https://www.facebook.com/BalkanMonitoringPublicFinance/

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