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INVESTIGATION THEME “ Impact of the financial crisis on debt management ” Coordination : CANADA

This investigation examines the impact of the financial crisis on debt management, focusing on information systems and coordination efforts in Canada and Brazil. It analyzes the changing role of debt management, the complexity of debt diversification, and the need for effective IT systems.

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INVESTIGATION THEME “ Impact of the financial crisis on debt management ” Coordination : CANADA

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  1. INVESTIGATION THEME“Impact of the financial crisis on debt management” Coordination: CANADA

  2. Impact of the financial crisis on debt management • In 2008, Canada proposed to lead an investigation paper on the impact of the financial crisis on debt management. • A brief outline was given by Canada to the Secretariat in 2009. • Since that proposal was made by Canada, the INTOSAI created last year a new task force: the Task Force on Global Financial Crisis (TFGFC).

  3. Task Force and WGPD • Considering the work presently performed by the Task Force • Canada has already recommended to the Secretariat that the investigation theme proposed in 2008 be reconsidered to assess potential overlap between the WGPD paper and the numerous theme papers being prepared by the TFGFC. • The TFGFC should complete its work over the coming months.

  4. Task Force and WGPD • We know that the roles for SAIs is being reviewed and discussed in many of the theme papers presently produced by the TFGFC in the context of the global financial crisis. • The impact on public finance and public debt will likely be reported. • A subgroup has been created to make the link between the TFGFC and the WGPD. • That subgroup might be looking more specifically at public debt issues.

  5. Task Force and WGPD • Canada recommends we postpone the decision to pursue the theme paper proposed by Canada with the support of Brazil until the TFGFC completes its work later this fall. • This will allow the WGPD to reposition the paper and make sure it will be valuable and useful for SAIs. • Based on the work performed by the TFGFC, this could mean the theme paper will be delayed or even cancelled. • Brazil agrees with this strategy

  6. INVESTIGATION THEME“Information systems related to debt management” Coordination: BRAZIL

  7. Information systems related to debt management • In our last meeting, Brazil assumed the leadership of the WGPD investigation theme “Information systems related to debt management”. • The Governmental Macro-evaluation Secretariat, is the unit at the Brazilian SAI responsible for carrying out the technical activities related to our new mission within WGPD.

  8. First steps • Literature review • Understand the problem from an overall perspective • Networking • Access institutions and professionals • IMF • World Bank • Unctad • Framework and strategy

  9. Framework and strategy • Goal: • To help WGPD develop guidance regarding the audit of information systems related to debt management that can be useful for all the INTOSAI community • Acknowledgment: • Public debt management activities vary considerably among countries. Thus, requirements for IT systems also vary.

  10. Framework and strategy • Develop guidance to help SAIs to identify their countries debt diversification level • Specify IT system requirements for different country debt diversification level • Develop guidance on what to audit regarding different country debt diversification level Is this framework useful for otherareasrelated to debt management? For example, human resources.

  11. Debt management changing role IncreasingComplexityandChoice Concessional bilateral & multilateral (e.g. IDA) Domesticmarketexpansion International capital markets Contingentliabilities (risk management) Integratedrisk management acrossgovernment • LimitedDomestic: • Captive sources • Short dated Non-concessional multilateral Access to derivatives Financial services for otherpartsofgovernment Source: ANDERSON, P. (2005) “The Changing Role of the Public Debt Manager”; June, 2005. Available at: http://r0.unctad.org/dmfas/docs/Anderson_june2005.pdf.

  12. How to classify? • 3 levels of diversification? • Low: only bilateral debt • Middle: multilateral and domestic market • High: risk analysis, complex debt management strategy • What to look at a first glance? • Country debt composition • Debt market and country insertion • Primary market • Secondary market

  13. Approach • Can this approach be useful for other subgroups within WGPD? • Should we go on? • Anyone would join?

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