This paper describes and evaluates the sovereign credit ratings methodologies of Standard & Poor''s, Moody''s Investors Service, and Fitch Ratings. A simple definition of ratings failure-based on ratings stability-is proposed and tested, pointing to falling failure rates, consistent upside bias,...

This paper proposes a probabilistic approach to public debt sustainability analysis (DSA) using ""fan charts."" These depict the magnitude of risks-upside and downside-surrounding public debt projections as a result of uncertain economic conditions and policies. We propose a simulation algorithm...

This paper questions the view that leverage should have forewarned us of the global financial crisis of 2007-09, pointing to several gearing indicators that were neither useful portents of the onset of the crisis nor of its ferocity. Instead it shows, first, that the use of ill-suited collateral...

Given the rapid evolution of the U.S. financial sector and attendant regulatory challenges, this paper explores ways to fine-tune U.S. oversight arrangements. It surveys the financial landscape, separating a highly regulated, multi-business, and (in terms of relative asset holdings) shrinking...

This paper builds on a Technical Note produced as part of the IMF’s 2010 Financial Sector Assessment Program (FSAP) review of the United States. It addresses enterprise-wide oversight of financial groups, a key tool to mitigate systemic risk. Focusing on legal arrangements, it recommends...

The notable rebound of U.S. manufacturing activity following the Great Recession has raised the question of whether the sector might be experiencing a renaissance. Using panel regressions, we find that a depreciating real exchange rate, an increasing spread in natural gas prices between the...

This paper questions the view that leverage should have forewarned us of the global financial crisis of 2007-09, pointing to several gearing indicators that were neither useful portents of the onset of the crisis nor of its ferocity. Instead it shows, first, that the use of ill-suited collateral...