A Micro Financing Framework for Rural Water and Sanitation Provisioning in Sub-Saharan Africa

This paper investigates potential issues with regard to water and sanitation. It argues that technological fixes alone are not enough and need to be complemented by other forms of innovation such as local community organization and financial innovation. It provides a micro financing framework that is founded on the Rotating Savings and Credit Associations (RoSCA) arrangements at the village level

The Regulatory Implications of Mobile and Financial Services Convergence

The long awaited integration of mobile telephone and retail financial services is beginning to emerge in developing markets. To enhance the potential benefits from innovations in this domain, governments need to make complementary adjustments to domestic banking regulation and strengthen frameworks for international cooperation. In particular, as a highly regulated activity, deposit taking is insufficiently contestable for mobile operators to break into the market with enough independence from incumbent banks to stimulate valuable competition and innovation in payment networks. The success of mobile banking will also depend on the willingness and capacity of regulators to accommodate increasing international trade in retail financial services, new forms of distribution and customer due diligence rules that are more appropriate to less traditional markets. The paper provides an analysis of the relation between existing regulatory frameworks and the rise of mobile banking. And it outlines policy changes that governments should pursue in order to foster this form of innovation and target the benefits that it can bring, especially to consumers on the margins or excluded from modern financial services.Technology and Industry

Imbalances in China and U.S. Capital Flows

China’s major imbalances include trade and capital account surpluses and a large annual build-up of international reserves. China has a capital account surplus reinforcing the accumulation of foreign exchange reserves, mainly U.S. dollar-denominated assets. Usually, a sustainable fixed or floating exchange rate system requires that a country with a large current account surplus run a capital account deficit. The U.S. is widely criticized for having a comparable trade deficit that mirrors, to a large extent, China’s surplus and for its dependence on large capital inflows including from China. There is political pressure for protectionism and for China to implement wasteful economic policies to reduce the surplus. Negative consequences of China’s imbalances include the build-up of large, low-return foreign exchange, leading to rapid growth in money and credit and to a sharp acceleration in inflation. Moreover, efforts to offset money growth and inflation have deepened inefficiencies in the financial system, which China had hoped to remedy by its efforts to recapitalize and list its banks’ equities on stock exchanges. China could eliminate these imbalances by policies that would reduce growth. One solution is to lift restrictions on capital outflows, allowing households and business to diversify their wealth holdings and realize higher returns and/or less volatility in their income and wealth. This would transform future asset growth to holdings of higher return, lower risk assets abroad and also would eliminate pressures on the People’s Bank of China, allowing for more rapid deregulation of banks, slower money and credit growth and lower inflation. The U.S. is already adjusting to these imbalances as the current account deficit began to decline in 2005 and the dollar has fallen dramatically. Unfortunately, such adverse developments are coming from political pressures to raise taxes, especially on capital resources income, and from protectionist policies, both of which are slowing growth in the U.S.Capital account imbalance, capital controls and banking inefficiencies, capital outflows and financial development, exchange rate management, banking regulation

Skill gaps in the EU: role for education and training policies

Skill gaps are widely seen as a problem that lowers aggregate productivity growth. A question for the European Commission is whether and how governments should take action with education and training policies to reduce skill gaps and make Europe the best performing region in the world. European citizens can best decide for themselves on the type of education. Distribution of information on occupation prospects is effective to influence their choice of education. Moreover, it is important that the education system is sufficiently flexible to absorb unexpected shocks in skill needs of employees. Policies stimulating education targeted at government-assigned sectors are risky policies. Intensification of general education at the cost of specific education, and intensification of training of employees find little support.

Modern Application of the Roman Institution of fiducia cum creditore contracta

This is a preprint of a piece that appeared in Letitia Vacca, ed., La Garanzia nella prospettiva storico-comparatisca (Torino, 2003), pp. 327-44.The author illustrates the modern application of the Roman fiducia cum creditore contracta by reference to the South African case of Nedcor Bank Ltd v Absa Bank Ltd 1998 2 SA 830 (W)

An evaluation of financial strategies used by companies in the retail sector during recession period (2000-2010).

This paper analyses financial strategies for Zimbabwean companies in the retail sector industry in an economy characterized by recession from 2000 to 2010. The paper sought to meet the following objectives among others; to identify the various operating financial strategies available for companies operating in recession; assess the applicability of various short and medium term financial strategies for Zimbabwean companies and; provide a prescription to various stakeholders in the retail sector on evidence based operating financial strategies. Research findings showed that many companies ceased operations voluntarily and in most cases involuntarily. Others adopted a variety of financial strategies ranging from scaling down operations, streamlining business operations, being selective in service delivery to putting plants and machinery under care and maintenance. There was liquidity crunch in the market and as a result, companies failed to get funding; banks failed to attract meaningful deposits to provide companies with funding. Lack of operating finance was the chief cause why companies failed to reach pre-2000 operating levels. The study recommended companies to taking advantage of priority option in making payments as well as adopting a thorough recession management approach. Ignoring the impact of recession and its repercussions with the view that it would go away proved to exacerbate the problem. Key words: Recession Management, Capacity Utilization, Depression, Multi-Currency, Working Capital

A Permanent Problem Requires A Permanent Solution

Although other studies have presented data on the number of federally- and state-subsidized units that are in danger of losing their affordability, there is a lack of recognition and understanding of the magnitude of at-risk, city-subsidized units. Therefore, ANHD set out to determine both the total number of city-subsidized units developed between 1987 and 2007, and establish how many of those units are at-risk of losing their affordability because of expiring regulatory agreements and mortgages. This period covers both Mayor Koch's original Ten-Year Plan that was continued by Mayors Dinkins and Giuliani, and the first four years of the Bloomberg Ten-Year plan.According to our analysis, 294,402 units were created or preserved with city subsidy over this twenty year period. While this is a tremendous accomplishment, 169,561 of these units may be at-risk of losing their affordability between 2017 and 2037 due to either expiring affordability restrictions or physical deterioration. This total does not include units developed under the city's Inclusionary Housing program, which requires permanence and those units under the control of mission-driven not-for-profit owners who are generally committed to maintaining affordability for the life of the building

Financing small and medium-size enterprises with factoring: global growth and its potential in eastern Europe

Factoring is a form of asset-based finance where the credit is extended based on the value of the borrower's accounts receivable. In recent years factoring has experienced phenomenal growth and has become an important source of financing-especially short-term working capital-for small and medium-size enterprises and corporations, reaching a worldwide volume of 760 billion euro in 2003. Although the importance of factoring varies considerably around the world, it occurs in most countries and is growing especially quickly in many developing countries. The authors explore the advantages of factoring over other types of lending for firms in developing economies, and discuss the informational, legal, tax, and regulatory barriers to its growth. They also examine the role of factoring in the eight Eastern European countries that became EU members on May 1, 2004-the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, the Slovak Republic, and Slovenia, referred to as the EU 8. The authors conclude that factoring offers key advantages over other lending products and is likely to become more important in these countries, and suggest policies to accelerate its development.Financial Intermediation,International Terrorism&Counterterrorism,Banking Law,Banks&Banking Reform,Payment Systems&Infrastructure,Banks&Banking Reform,Banking Law,Financial Intermediation,International Terrorism&Counterterrorism,Economic Theory&Research

"The Fallacy of the Revised Bretton Woods Hypothesis: Why TodayÕs International Financial System Is Unsustainable"

The stability of the international financial system is in doubt. Analysis of the system has focused mainly on the sustainability of financing the U.S. trade deficit and has failed to understand the microeconomics of transactions within the system. According to this brief by Thomas I. Palley, the international financial system is unsustainable for reasons of demand, not supply. He recommends a global system of managed exchange rates to replace the current system before it crashes, along with the U.S. economy. East Asian economies are pursuing export-led growth and running huge trade surpluses with the United States by actively pursuing policies aimed at maintaining undervalued exchange rates. Their governments continue to accumulate U.S. financial assets in order to support and stabilize the international financial system.While East Asian policymakers are correct in their belief that they can improve economic outcomes through exchange rate intervention, the system is undermining the structure of income and aggregate demand and eroding U.S. manufacturing capacity.