صندوق بین المللی پول در دنیای بازارهای سرمایه خصوصی

In analyzing the IMF attempts to stabilize private capital flows, we contrast cases where banks and bondholders do the lending. Consistent with banks’ natural advantage in monitoring, they reduce spreads as they obtain more information through repeat transactions with borrowers. By comparison, repeat borrowing has little influence in bond markets, where publicly-available information dominates. But spreads on bonds are lower when they are issued in conjunction with an IMF-supported program, as if the existence of a program conveys positive information to bondholders. The influence of IMF monitoring in bond markets is especially pronounced for countries vulnerable to liquidity crises.

Catalyzing private capital flows to emerging markets has been an objective of the International Monetary Fund since the 1990s, if not before.1 The Fund provides public monitoring services and negotiates programs that enable the borrowers to reveal their commitment to sound macroeconomic policies. In addition, its own lending may stabilize capital flows by providing bridge finance for creditworthy countries experiencing liquidity crises, the resolution of which may be difficult to coordinate for atomistic lenders. In this paper, we seek to better understand the roles of IMF monitoring and lending and provide new evidence of their effects. We analyze the impact of IMF-supported programs on market access and the cost of funds, building on three insights. • First, if banks are already engaged in monitoring as part of their normal operation, then IMF monitoring should have a relatively limited impact when bank syndicates do the lending. • Second, private capital flows should be particularly sensitive to the magnitude of IMF financial commitments when the likelihood of debt restructuring is high. • Third, precautionary programs are a mechanism through which governments can use their relationship with the IMF to signal their commitment to strong policies. Differences in the impact of precautionary and regular IMF programs should therefore be useful for distinguishing the Fund’s monitoring and lending roles. Our analysis is based on more than 6700 loan transactions between emerging market borrowers and international bank syndicates and some 3500 new bond issues placed between 1991 and 2002. We analyze the frequency of transactions and the spreads charged. Among the explanatory variables are a measure of repeat borrowing that proxies for creditor learning about borrower characteristics, as well as the existence and size of IMF programs. Because we analyze individual transactions rather than aggregate capital flows or other macroeconomic conditions, our findings are less susceptible to causality running from the outcome to the decision to initiate an IMF program.2 Important differences between bank loans and bond issues have been documented in the domestic context.3 Banks act as delegated monitors on behalf of investors who cannot easily observe and discipline borrowers (Diamond, 1984). The information they acquire can be used to limit the use of funds and for pricing loans. In contrast, individual bondholders lack the incentive to incur the costs of securing expensive private information about borrowers. Instead, public information – for example, the information assembled by credit rating agencies – dominates the market for debt securities. At the same time, securitized debt instruments have superior risk-sharing characteristics. Credit risk can be diversified away, in part, by spreading individual loans across investors and enabling them to hold diversified portfolios. Banks cannot engage in this practice to the same extent without eroding their incentive to invest in dedicated monitoring technologies. This tradeoff is a way of understanding why lending takes place through both banks and bond markets. Banks can also more easily coordinate their actions in response to default and restructuring. They are relatively few in number and contractual arrangements such as sharing clauses reduce the incentive to hold out. The advantages of creditor coordination may make it even more profitable for banks to monitor borrowers, as we explain below. Thus, it is not necessary to assume that banks have an intrinsically superior ability to monitor, in other words; they may simply have more incentive to invest in gathering and using relevant information. Eichengreen and Mody (1998) find that spreads on syndicated loans fall with the number of loans extended to a borrower. An interpretation is that contact through repeat borrowing informs creditors about borrower characteristics, reducing uncertainty and risk premia. That earlier paper did not also consider repeat borrowing in bond markets. We do so here, hypothesizing that this effect is stronger for bank loans than bonds in part because coordination allows banks to make better use of any information thereby gleaned. The other potential monitor is the IMF.4 By putting a program in place, the Fund may be able to acquire information not also available to the private sector, or to acquire it at lower cost. Indeed, the Fund may convey information to the markets when it does not have superior monitoring technology. Negotiating an IMF program may simply be a way for a government to signal its type.5 Imagine that the standard conditions attached to Fund programs are easier to satisfy for either economic or political reasons by governments truly committed to strong policies and that violating that conditionality has significant costs. Then a country with strong policies will be more likely to sign up for a program, signaling its type and lowering its spreads. A special case in point is when an IMF lending arrangement is converted into a precautionary program.6 A country then volunteers to not draw on IMF resources while still allowing itself to be subjected to Fund monitoring and conditionality.7 The Fund’s monitoring should be particularly important for bond markets not inhabited by a small number of large investors (banks) prepared to individually invest in ascertaining the government’s type. At the same time, IMF lending, by reducing the probability of default, could nullify the creditor coordination advantage of banks. Consistent with these hypotheses, we find that repeat borrowing is more important in reducing the costs of borrowing from bank syndicates than bond markets. In contrast, public monitoring through IMF programs has a larger impact on spreads in markets dominated by bonds than bank loans, again consistent with our priors. But the IMF’s presence and lending have different effects in countries in different situations. For countries with external debt/GDP ratios below 60% range, it is the IMF’s presence, as distinct from its lending, that matters for bond market access (see Pattillo et al., 2004 and Reinhart et al., 2003). We interpret this as consistent with arguments emphasizing the Fund’s monitoring and signaling roles. As debt rises from there, IMF presence is still associated with lower spreads but to a diminishing extent. The impact of IMF presence disappears when debt reaches 70% of GDP. Moreover, there is little evidence in this high debt range that additional IMF lending reduces spreads and enhances market access. For countries in this range, neither IMF presence nor IMF lending significantly enhances market access. Evidently, countries with such high debts have deep structural problems that must be solved before IMF intervention can catalyze external finance. Only programs that turn precautionary – that is, where the outlook improves sufficiently that the country can voluntarily choose to stop drawing on Fund resources – have a significant negative impact on borrowing costs at high debt levels. This finding is again consistent with our arguments regarding country signaling and IMF monitoring. The next two sections provide evidence on differences in international lending through bank loans and bond markets. We then analyze the factors that go into the decision to borrow and the further choice between loans and bonds. The results confirm that IMF programs do more to facilitate bond issuance than bank lending. Finally, we document the importance for the pricing of loans and bonds of private monitoring in bank lending and of public monitoring through IMF programs in bond markets.

Bank loans and bonds are alternative ways of transferring capital to emerging markets. The growth of global bond markets is of course one of the signal features of the last 15 years of international financial history. Transacting through bond markets has obvious advantages for investors, notably greater scope for diversifying country risk. Given the advance of securitization across a broad front, it is therefore useful to recall why bank finance continues to play an important role in international financial markets. Bank loans are easier to access for borrowers new to such markets, since banks have a comparative advantage in bridging information asymmetries. Banks’ intermediation technologies are also better suited to providing small loans. We show in this paper, how the ability of banks to bridge information asymmetries is supported by repeat borrowing. As borrowers return for credit, they reveal information about themselves, reducing uncertainty and hence incurring a lower risk premium on their loans. Since the issuers of bonds are better known, the value of information obtained through repeat issuance is less. Indeed, to the extent that it results in a proliferation of separate bond issues, repeat borrowing may in fact increase the risk premium, reflecting the greater difficulty of coordinating the holders of different issues in the event of debt-servicing difficulties. These observations have obvious relevance to arguments about IMF monitoring and surveillance of indebted countries. Our results suggest that IMF monitoring and surveillance matter more in bond markets. This role for the IMF has the largest impact when debts reach 40% of GDP and countries are therefore vulnerable to liquidity shocks. However, as debts continue rising from there, the impact of monitoring declines. There being relatively little uncertainty about the nature of the problem, lenders now care mainly about whether the IMF is providing real resources that help to keep debt service current. But as debt and the risk of insolvency grow still higher, even a significant amount of additional official finance may not be enough to make a difference. At that point, what matters most is when programs turn precautionary, signaling that conditions have improved sufficiently that the country no longer requires financial assistance. There clearly is further scope for elaborating these results. More generally, the approach taken here points to the importance of distinguishing capital international flows by instrument and intermediary. Macroeconomic analyses lumping together bank loans and bonds will tend to neglect important differences between these market segments that stem from the nature of the information environment, the monitoring technology, and the scope for creditor coordination. We have shown in this paper that these distinctions are important for understanding the impact of IMF programs. We would conjecture that the same is true for a variety of other issues in international finance.