Sovereign debt and Innovative Financing Instruments for Emerging Markets

Izmir, Turkey

May 1-2, 2005



The seminar in Izmir provided a variety of opinions about the creation of innovative financing instruments. Does financial innovation improve a country’s creditworthiness? Does the creation of innovative schemes improve the conditions under which governments are able to tap the financial markets (i.e., reduce the net present value of the debt)? Would such approaches open the market for countries, particularly in cases where, because of risk considerations, the “plain vanilla“ option is not available?  It was noted that, from the perspective of issuers, the case for innovation in emerging markets is linked to the need to minimize the stream of debt service payments and to reduce their associated volatility. Investors, on the other hand, will seek to maximize the future stream of returns and, likewise, reduce their associated volatility. While there are some inner tensions between these—specifically around the question of returns—the interests of issuers and investors converges on the need to minimize the risks of default and the coalescence of these interests is the basis for financial innovation. 



  • Alberto MUSALEM: Managing Director, Tudor Investments
  • Ali BABACAN: Minister of State for the Economy, Turkey
  • Bandid NIJATHAWORN: Deputy Governor, Bank of Thailand
  • Daniel MARX: Managing Director, Center for Financial Stability, Argentina
  • Erdem BASCI: Vice Governor, Central Bank of Turkey
  • Eugenio ALARCON-YTURBIDE: Deputy Director General, Ministry of Finance, Mexico
  • Giorgio GOMEI: Director, International Affairs, Bank of Italy
  • Jens NYSTEDT: Director, Deutsche Bank Emerging Markets
  • Jihad AZOUR: Economic Advisor, Lebanon
  • John WILLIAMSON: Senior Fellow, Institute for International Economics, USA
  • Konrad REUSS: Managing Director, Europe, Middle East & Africa, Sovereign ratings, Standard & Poor’s
  • Kristin FORBES: Member of the Council of Economic Advisers, USA
  • Marc UZAN: Executive Director, Reinventing Bretton Woods Committee
  • Paolo MAURO: Head, Strategic issues Division, IMF Research Department
  • Philip TURNER: Manager, Emerging Markets Secretariat, BIS
  • Pierre CAILLETEAU: Senior Vice President, Moody’s Investors
  • Richard SAMANS: Managing Director, World Economic Forum
  • Robert SHILLER: Professor of Economics, Yale University
  • Süreyya SERDENGECTI: Governor, Central Bank of Turkey

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