Events

2016 Sovereign Debt Management Forum: Sovereign Debt Management in Emerging Markets: Is the Party Over?

October 19-20, 2016

Washington, D.C.

The 8th Sovereign Debt Management Forum will review recent trends and developments in sovereign debt management and provide debt managers, primarily from developing and emerging market countries, with the opportunity to share their experiences. The agenda will explore the challenges of the current environment and discuss possible responses from the debt management community. In addition, the Forum will bring into focus a range of technical issues associated with implementing sound practices in public debt management.

  • WEDNESDAY, OCTOBER 19, 2016

    7:30 a.m. REGISTRATION AND BREAKFAST Venue: Main Complex (MC) Front Lobby (Main Level)

    9:00 a.m. OPENING REMARKS Venue: Preston Auditorium (Main Level) Speaker: Arunma Oteh, Vice President and Treasurer, World Bank Treasury

    9:10 a.m. KEYNOTE ADDRESS: A forward look at the global economy: where do we go from here? Keynote Speaker: Carlos Felipe Jaramillo, Senior Director, Macroeconomics and Fiscal Management Global Practice, World Bank Group

    9:30 a.m. PLENARY SESSION 1: The world economy after the crisis: a new conundrum for debt managers Venue: Preston Auditorium (Main Level) After a decade of benign external macroeconomic conditions, emerging markets have recently been losing ground following the 2008-2009 global financial crisis. While global interest rates remain at historically low levels, widening imbalances in the fiscal and external accounts of emerging market countries are arising as a result of tepid growth and corrections in commodity prices. External imbalances have triggered the depreciation of a number of currencies, which has been driving central banks to increase policy rates, while emerging market government borrowing spreads have been widening. On top of this, debt managers are facing higher borrowing requirements coupled with rising funding costs at a time where risk aversion is creeping up and capital flows are more volatile. This session will explore the challenges of the current environment and discuss possible responses from the debt management community. Moderator: Arunma Oteh, Vice President and Treasurer, World Bank Treasury Panelists: Branko Drčelić, Acting Director, Public Debt Administration, Ministry of Finance, Serbia Cristina Casalinho, Chief Executive Officer, IGCP, Portugal Jose Franco Medeiros Morais, Undersecretary of Public Debt, National Treasury of Brazil Suwit Rojanavanich, Director General of Public Debt Management, Ministry of Finance, Thailand

    10:45 a.m. COFFEE BREAK (Outside Breakout Session Rooms) Breakout Session 1: MC 2-800 (Level 2) Breakout Session 2: MC C2-131 (Basement Level C2)

    11:15 a.m. PARALLEL BREAKOUT SESSIONS 1 AND 2

    BREAKOUT SESSION 1: Why liquidity matters? Primary and secondary market issues Venue: MC 2-800 (Level 2) The role of banks in sovereign bond markets is evolving primarily due to: (i) the regulatory and prudential changes introduced in the aftermath of the 2008-09 crisis (negative: less of the balance sheet allocated to fixed income, leverage ratio requirements; positive: HQLA and liquidity coverage ratio); and (ii) quantitative easing programs introduced by advanced central banks. As a result, concerns have arisen regarding the ability of banks as primary dealers to support government bond auctions and secondary market liquidity. At the same time, new participants have emerged in sovereign bond markets such as high frequency trading investors (these investors reportedly now represent the largest share of transactions in US Treasuries). The investment strategies of more traditional investors, such as money market funds, have also been evolving. The long term consequences of these changes on sovereign bond market liquidity are still uncertain but the risk remains that liquidity could dry up rapidly, particularly in times of stress, even in the largest and most liquid sovereign bond markets. This session will discuss the impact of the current liquidity environment and recent developments in both primary and secondary markets for government securities. Moderator: Don Sinclair, Lead Financial Officer, Capital Markets Department, World Bank Treasury Speakers: Michael McMorrow, Assistant Vice President, New York Federal Bank Frank O’Connor, Director, Funding and Debt Management, National Treasury Management Agency, Ireland Jo Whelan, Deputy Chief Executive, Debt Management Office, United Kingdom

    BREAKOUT SESSION 2: The role of debt managers in managing fiscal risks Venue: MC C2-131 (Basement Level C2) Fiscal risks can lead to deviations in outcomes compared to fiscal projections and can have a negative impact on government finances. Such risks can stem from various sources, like deviations in economic growth from expectations, terms of trade shocks and various types of contingent liabilities. Contingent liabilities can include claims from government guarantees, debt of struggling state-owned enterprises, financial sector crises, the failure of social security funds, natural disasters, the failure of PPPs, to name a few. Identifying, assessing and managing these fiscal risks is increasingly capturing the attention of government risk managers. Governments have undertaken reform initiatives with the aim of raising transparency around: (i) fiscal risks they are exposed to; (ii) the institutional setup of risk management; (iii) the development of analytical approaches in assessing risks; and (iv) in designing risk management tools for risk mitigation. As the entity ultimately facing the challenge of financing the expected and unexpected changes from realized fiscal risks, debt management offices have a role in planning for and implementing these reforms. Moderator: Cigdem Aslan, Lead Financial Officer, Financial Advisory and Banking, World Bank Treasury Speakers: Brian Olden, Deputy Division Chief, Fiscal Affairs Department, International Monetary Fund Anthony Julies, Deputy Director General, Asset and Liability Management, National Treasury of South Africa Esther Finnbogadóttir, Head of Funding and Debt Management, Ministry of Finance and Economic Affairs, Iceland

    12:45 p.m. LUNCHEON Venue: Atrium (Center Lobby, Main Level)

    2:30 p.m. PARALLEL BREAKOUT SESSIONS 3 AND 4

    BREAKOUT SESSION 3: Debt management strategies for commodity exporters: what are the lessons of the past year? Venue: MC C2-131 (Basement Level C2) The end of record-high commodity prices and booming global trade has put commodity exporters in a situation that they have never experienced before: the sharp deterioration of government revenues has forced them to become active debt issuers. Particular challenges include making the trade-off between issuing debt and selling assets, developing a domestic investor base and setting up a debt management unit. This session illustrates these challenges and how commodity exporters are addressing them. Moderator: Daniel Hardy, Division Chief, Debt and Capital Market Instruments Division, International Monetary Fund Speakers: Azer Mursagulov, Deputy Director, Public Debt Management Agency, Ministry of Finance, Azerbaijan Grahame Johnson, Chief of Funds Management Department, Bank of Canada Abraham Ekwuton Nwankwo, Director-General, Debt Management Office, Nigeria

    BREAKOUT SESSION 4: Choosing between USD or EUR-denominated debt in the international markets Venue: MC 2-800 (Level 2) Divergent monetary policies in US, the Eurozone and Japan are widening the interest rate differentials and generating pressures for a potential appreciation of the US dollar. In this context, traditional USD issuers have stepped up their issuance of EURO-denominated bonds. This session explores the issuers’ motivations and discusses the tactical versus strategic nature of such issuance operations including the use of cross currency swaps and the potential future of these transactions. Moderator: Antonio Velandia, Lead Financial Officer, Financial Advisory and Banking, World Bank Treasury Speakers: Carlos Blanco, General Director of Public Debt and Treasury, Ministry of Economy and Finance, Peru Kemal Ҫağatay Imirgi, Deputy Director General, Undersecretariat of Treasury, Turkey Lior David-Pur, Head of Risk Management, Ministry of Finance, Israel

    4:00 p.m. COFFEE BREAK Venue: Front Lobby (Main Level)

    4:30 p.m. PLENARY SESSION 2: Are government securities still attractive and risk-free? An investor’s perspective Venue: Preston Auditorium (Main Level) Recent years have changed considerably the panorama of sovereign debt issuers. It is not only emerging market borrowers that have experienced a series of downgrades due to the imbalances discussed above, but developed countries have also had to cope with these challenges. At the same time, the number of triple-A sovereign issuers has fallen. This session will discuss how investors are reacting to the volatilities and uncertainties in emerging markets and identify the implications of these downgrades, either observed or expected, by bringing views from institutional investors - such as central banks, asset managers and hedge funds – and debating the current drivers of investor demand. Moderator: Tenzing Sharchok, Lead Financial Officer, Capital Markets Department, World Bank Treasury Speakers: Ulrik Harald Bie, Chief Economist, Institute of International Finance Mahesh Jayakumar, Senior Portfolio Manager, State Street Global Advisors Pieter Moore, Senior Risk Officer, Central Bank of the Netherlands Ashok Parameswaran, Vice President, American International Group (AIG) Investments

    6:00 - WELCOME RECEPTION 8:00 p.m. Venue: Front Lobby (Main Lobby)

    THURSDAY, OCTOBER 20, 2016

    8:00 a.m. BREAKFAST Venue: Front Lobby (Main Level)

    9:00 a.m. KEYNOTE ADDRESS: The World Bank’s Role in the Global Financial System: Reactions from a Recent Outsider Venue: Preston Auditorium (Main Level) Keynote Speaker: Paul Romer, Senior Vice President & Chief Economist, World Bank Group

    9:20 a.m. PLENARY SESSION 3: Domestic markets as an answer to future challenges Venue: Preston Auditorium (Main Level) In the “new normal” of muted economic growth in industrial countries, continuous private sector deleveraging and greater uncertainty in the commodity and financial markets, it is essential for emerging markets to increase their reliance on domestic markets. This session highlights the efforts made by public debt management offices and other parties in developing deep and liquid debt markets. This includes promoting more active trading of government securities by improving regular supply of them, proactively engaging with investors to strengthen the demand and modernizing the market infrastructure. The session will also discuss the contribution made by multilaterals to expand local currency financing and their treasury operations in member countries’ currencies. Moderator: Anderson Caputo Silva, Lead Financial Sector Specialist, Finance and Markets Global Practice, World Bank Group Speakers: El Hassan Eddez, Deputy Director of Treasury and External Finance, Head of Debt Office, Ministry of Finance, Morocco György János Barcza, Chief Executive Officer, Government Debt Management Agency, Hungary George Richardson, Director, Capital Markets Department, World Bank Treasury

    10:50 a.m. COFFEE BREAK (Outside Breakout Session Rooms) Breakout Session 5: MC 2-800 (Level 2) Breakout Session 6: MC C2-131 (Basement Level C2)

    11:15 a.m. PARALLEL BREAKOUT SESSIONS 5 AND 6

    BREAKOUT SESSION 5: Are retail debt programs still relevant today? Venue: MC 2-800 (Level 2) Retail debt programs have evolved materially during the last decade. While advanced countries are assessing the relevance and cost-effectiveness of their long-standing programs, a number of emerging markets have launched retail debt programs with innovative features. This session will discuss the new trends in retail debt programs and how innovation and technology are evolving. Moderator: Sébastien Boitreaud, Lead Financial Officer, Financial Advisory and Banking, World Bank Treasury Speakers: Suwit Rojanavanich, Director General of PDMO, Ministry of Finance, Thailand Jose Franco Medeiros Morais, Undersecretary of Public Debt, National Treasury of Brazil György János Barcza, Chief Executive Officer, Government Debt Management Agency, Hungary Brandon Taylor, Bureau of the Fiscal Service, U.S. Treasury

    BREAKOUT SESSION 6: Debt management IT systems Venue: MC C2-131 (Basement Level C2) A debt management information system (DMIS) is the backbone of any debt management office. It supports core debt management functions such as debt recording and debt related payments. A robust, well-functioning and user-friendly system allows governments to reduce the operational risk, produce tailored reports, improve the business process and run various analyses. In brief, a good system strengthens the debt management environment. The session will discuss questions such as: (i) which core functions should be part of a DMIS; (ii) how can a DMIS reduce operational risk and strengthen internal controls; (iii) should debt management offices incorporate their risk models in a DMIS; and (iv) what are the challenges in linking with FMIS systems. Moderator: Cem Dener, Lead Governance Specialist, Information Systems & Global Lead, World Bank Group Speakers: Tebogo Letshwene, Director, Asset and Liability Management Division, National Treasury of South Africa Pankaj Pratap Singh, Chief Accountant, Ministry of Economy, Fiji Marcelo Tricarico, Public Debt Management Expert

    12:45 p.m. LUNCHEON Venue: Atrium (Center Lobby, Main Level) 2:00 p.m. PARALLEL BREAKOUT SESSIONS 7 AND 8

    BREAKOUT SESSION 7: Innovative financial solutions for implementing debt and risk management strategies Venue: MC 2-800 (Level 2) The implementation of debt and risk management strategies can be fostered by active debt management including liability management operations, the use of derivatives, or managing risks of other (contingent) liabilities of the government. This session will relate to previous sessions, for example, on fiscal risk management, debt management for commodity exporters or importers and the choice of currency when issuing in international capital markets. Participants in this session will discuss innovative financial solutions, beyond the issuance program, to increase the resilience of the government’s balance sheet by managing risks from various sources such as exchange rate movements, natural disasters and commodity price changes. Moderator: Luis de la Plaza, Lead Financial Officer, Financial Advisory and Banking, World Bank Treasury Speakers: Herman Kamil, Director of Public Debt, Ministry of Economy and Finance, Uruguay Moritz Kraemer, Global Chief Rating Officer, S&P Global Ratings Maximo Silberberg, Executive Director, J.P. Morgan Nikhil Da Victoria Lobo, Senior Vice President, Swiss Re

    BREAKOUT SESSION 8: Linkages between debt sustainability and debt management strategies Venue: MC C2-131 (Basement Level C2) Debt sustainability refers to the ability of countries to meet future debt obligations without unduly large adjustments that could otherwise compromise their stability. Debt sustainability is largely driven by fiscal policy but debt management can also impact debt sustainability. Fiscal policy has a large impact on debt levels, while debt management is concerned with the structure of debt portfolios. As such, debt sustainability and debt management are linked and bi-directional. Insights from debt sustainability analysis, for example on key macroeconomic variables, can be inputs to a debt management strategy. On the other hand, the development of a debt management strategy can strengthen fiscal planning by contributing an analysis of the likely, and possible, budget implications of implementing the strategy. This session will explore the interlinkages between debt sustainability analysis and debt management strategies and how they can inform and support one another. Moderator: Abha Prasad, Lead Debt Specialist, Macroeconomics and Fiscal Management Global Practice, World Bank Group Speakers: Myrvin Anthony, Senior Economist, Strategy, Policy and Review Department, International Monetary Fund Branko Drčelić, Acting Director, Public Debt Administration, Ministry of Finance, Serbia Marine Melikyan, Chief Specialist, Ministry of Finance, Armenia Samuel Arkhurst, Director, Ministry of Finance and Economic Planning, Ghana

    3:30 p.m. COFFEE BREAK Venue: Front Lobby (Main Level)

    4:00 p.m. PLENARY SESSION 4: A more holistic approach to public debt and risk management Venue: Preston Auditorium (Main Level) Sovereigns tend to address risks independently and mostly fail to assess risks in a collective way. Sovereign Asset and Liability Management (SALM) addresses risks collectively by covering not only a government’s debt portfolio but also other assets and liabilities. Many countries acknowledge the importance of SALM but only a limited number of countries are likely to build the required capacity for implementation. This session will discuss the key issues in implementing a SALM, such as the conceptual balance sheet approach, institutional arrangements and coordination between monetary and fiscal policy. Moderator: Coskun Cangoz, Manager, Government Debt and Risk Management, World Bank Treasury Speakers: Hans Blommestein, Associate Director, Vivid Economics, United Kingdom Grahame Johnson, Chief of Funds Management Department, Bank of Canada Andrew Hagan, Head of Risk Policy and Balance Sheet, Debt Management Office, New Zealand Joo Sueb Lee, Director, Ministry of Strategy and Finance, Korea

    5:30 p.m. CLOSING REMARKS Venue: Preston Auditorium (Main Level) Speaker: Axel Peuker, Director, Financial Advisory and Banking, World Bank Treasury

  • Plenary 2: Are government securities still attractive and risk-free? An investor’s perspective?

    Sovereign Ratings Matter
    Global Outlook Active Global Fixed Income
    Country Case of Netherlands
    Governance and Financial Markets

    Plenary 3: Domestic markets as an answer to future challenges

    Country Case of Morocco

    Plenary 4:  A more holistic approach to public debt and risk management

    Do We Need a New Conceptual Frameworks for Government Debt Management?
    Country Case of Canada
    Country Case of New Zealand
    Country Case of Korea
    Sovereign Asset and Liability Management (SALM)

    Breakout Session 2: The role of debt managers in managing fiscal risks

    Fiscal Risk Analysis & Management

    Breakout Session 3: Debt management strategies for commodity exporters: what are the lessons of the past year?

    Country Case of Azerbaijan
    Country Case of Canada
    Country Case of Nigeria

    Breakout Session 4: Choosing between USD or EUR-denominated debt in the international markets

    Country Case of Peru
    Country Case of Turkey
    Country Case of Israel

    Breakout Session 5: Are retail debt programs still relevant today?

    Country Case of Thailand
    Country Case of Brazil

    Breakout Session 6: Debt management IT systems

    Debt Management Information System

    Breakout Session 7: Innovative financial solutions for implementing debt and risk management strategies

    Country Case of Uruguay
    How Climate Change Can Impact Sovereign Ratings
    Risk Management Discussion
    Financial Solutions for Risk Management

    Breakout session 8: Linkages between debt sustainability and debt management strategies

    Multidimensional Nature of Public Debt Risks
    Country Case of Serbia
    Country Case of Armenia
    Country Case of Ghana