1 Eduardo Levy Yeyati UTDT Business School & IDB Sovereign Debt in LAC 2 Three degrees of vulnerability DSA: Size (stock & cost) Debt ratios Volatility (indexation) Currency (dollars, pesos & CPI) Liquidity (effective duration) Location (domestic & external) Creditor (private & official) 3 Debt ratios are growing... Sample: Argentina, Belize, Bolivia, Brazil, Chile, Costa Rica, Ecuador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Trinidad & Tobago, Uruguay. 4...with a different composition 5 Borrowing at home... 6...mostly in local currency... Sample: Argentina, Brazil, Honduras, Nicaragua, Panama, Uruguay, Venezuela 7 Private Pension Funds Holdings of Market Instrument Debt, in percent...with the help of institutional investors 8 External debt... 9...is still predominantly official... 10...with IFIs gaining in importance... 11...as concessional bilateral lending makes a bow 12 Within private sources... 13...bonded debt is replacing bank debt... 14...only in EMs 15 Similarly, for domestic debt... 16... 17 Debt ratios looks different in net terms 18 How do these data compare with availables sources? 19 Main divergence: EMs 20 Three degrees of vulnerability Size Debt ratios are growing (cost?) Volatility Slow de-dollarization Based on domestic demand (with the help of CPI- indexacion & pension funds) Liquidity Domestic bias Is domestic debt more flexible? Still too much official debt? 21 Eduardo Levy Yeyati UTDT Business School & IDB Sovereign Debt in LAC