Financial Globalization and the Russian Crisis of 1998

Pinto, Brian; Ulatov, Sergei

dc.creator	Pinto, Brian
dc.creator	Ulatov, Sergei
dc.date	2012-03-19T18:39:59Z
dc.date	2012-03-19T18:39:59Z
dc.date	2010-05-01
dc.date.accessioned	2023-02-17T21:03:44Z
dc.date.available	2023-02-17T21:03:44Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100517152914
dc.identifier	http://hdl.handle.net/10986/3797
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244761
dc.description	Russia had more-or-less completed the privatization of its manufacturing and natural resource sectors by the end of 1997. And in February 1998, the annual inflation rate at last dipped into the single digits. Privatization should have helped with stronger micro-foundations for growth. The conquest of inflation should have cemented macroeconomic credibility, lowered real interest rates, and spurred investment. Instead, Russia suffered a massive public debt-exchange rate-banking crisis just six months later, in August 1998. In showing how this turn of events unfolded, the authors focus on the interaction among Russia's deteriorating fiscal fundamentals, its weak micro-foundations of growth and financial globalization. They argue that the expectation of a large official bailout in the final 10 weeks before the meltdown played an important role, with Russia's external debt increasing by $16 billion or 8 percent of post-crisis gross domestic product during this time. The lessons and insights extracted from the 1998 Russian crisis are of general applicability, oil and geopolitics notwithstanding. These include a discussion of when financial globalization might actually hurt and a cutoff in market access might actually help; circumstances in which an official bailout could backfire; and why financial engineering tends to fail when fiscal solvency problems are present.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5312
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCOUNTING
dc.subject	ACCOUNTING STANDARDS
dc.subject	ARBITRAGE
dc.subject	ARREARS
dc.subject	ASSET QUALITY
dc.subject	AUCTION
dc.subject	AUCTIONS
dc.subject	BAILOUT
dc.subject	BAILOUTS
dc.subject	BALANCE SHEET
dc.subject	BALANCE SHEETS
dc.subject	BALANCE-OF-PAYMENTS CRISES
dc.subject	BANK DEBT
dc.subject	BANK DEPOSITS
dc.subject	BANK PORTFOLIOS
dc.subject	BANK SUPERVISION
dc.subject	BANKING CRISIS
dc.subject	BANKING SYSTEM
dc.subject	BANKRUPTCY
dc.subject	BASIS POINTS
dc.subject	BENCHMARK BONDS
dc.subject	BID
dc.subject	BOND
dc.subject	BOND SPREAD
dc.subject	BOND SPREADS
dc.subject	BORROWING COSTS
dc.subject	BROAD MONEY
dc.subject	BUDGET CONSTRAINTS
dc.subject	CAPITAL ACCOUNT
dc.subject	CAPITAL ALLOCATION
dc.subject	CAPITAL FLOW
dc.subject	CAPITAL FLOWS
dc.subject	CAPITAL INFLOWS
dc.subject	CAPITAL MARKETS
dc.subject	CASH SETTLEMENTS
dc.subject	CENTRAL BANK
dc.subject	COLLATERAL
dc.subject	COMMERCIAL BANK
dc.subject	COMMERCIAL BANKS
dc.subject	CONSUMER GOODS
dc.subject	CORPORATE BONDS
dc.subject	CORPORATE GOVERNANCE
dc.subject	COUPON
dc.subject	CREDIBILITY
dc.subject	CREDIT RISKS
dc.subject	CREDIT SPREADS
dc.subject	CREDIT SQUEEZE
dc.subject	CREDITORS
dc.subject	CRISIS COUNTRIES
dc.subject	CURRENCY
dc.subject	CURRENCY CRISIS
dc.subject	CURRENCY DEPRECIATION
dc.subject	CURRENCY MISMATCHES
dc.subject	CURRENT ACCOUNT DEFICIT
dc.subject	CURRENT ACCOUNT SURPLUS
dc.subject	CURRENT ACCOUNT SURPLUSES
dc.subject	DEBT BURDEN
dc.subject	DEBT FINANCING
dc.subject	DEBT INSTRUMENTS
dc.subject	DEBT OBLIGATIONS
dc.subject	DEBT OUTSTANDING
dc.subject	DEBT PAYMENTS
dc.subject	DEBT RESTRUCTURING
dc.subject	DEBT SWAPS
dc.subject	DEFAULT RISK
dc.subject	DEPOSIT
dc.subject	DEPOSITORS
dc.subject	DEPOSITS
dc.subject	DERIVATIVES
dc.subject	DEVALUATION
dc.subject	DEVELOPING COUNTRIES
dc.subject	DIRECTED CREDITS
dc.subject	DISBURSEMENT
dc.subject	DOLLAR DEBT
dc.subject	DOMESTIC CREDIT
dc.subject	DOMESTIC CURRENCY
dc.subject	DOMESTIC INTEREST RATE
dc.subject	DOMESTIC INTEREST RATES
dc.subject	EMERGING MARKET
dc.subject	EMERGING MARKET ECONOMIES
dc.subject	EMERGING MARKETS
dc.subject	ENTERPRISE OPERATIONS
dc.subject	EUROBOND
dc.subject	EXCHANGE RATE
dc.subject	EXCHANGE RATES
dc.subject	EXPENDITURE
dc.subject	EXPORTERS
dc.subject	EXTERNAL DEBT
dc.subject	EXTERNAL DEBTS
dc.subject	EXTERNAL FUNDING
dc.subject	FACE VALUE
dc.subject	FEDERAL RESERVE
dc.subject	FEDERAL RESERVE BANK
dc.subject	FEDERAL RESERVE SYSTEM
dc.subject	FINANCIAL CRISIS
dc.subject	FINANCIAL LIBERALIZATION
dc.subject	FINANCIAL MANAGEMENT
dc.subject	FINANCIAL STABILITY
dc.subject	FINANCIAL SUPPORT
dc.subject	FINANCIAL SYSTEM
dc.subject	FISCAL DEFICIT
dc.subject	FISCAL DEFICITS
dc.subject	FISCAL POLICY
dc.subject	FIXED EXCHANGE RATE
dc.subject	FOREIGN BANKS
dc.subject	FOREIGN CURRENCY
dc.subject	FOREIGN CURRENCY DEBT
dc.subject	FOREIGN EXCHANGE
dc.subject	FOREIGN EXCHANGE RESERVES
dc.subject	FOREIGN INTEREST
dc.subject	FOREIGN PORTFOLIO INVESTMENT
dc.subject	FORGIVENESS
dc.subject	FUND MANAGERS
dc.subject	GLOBALIZATION
dc.subject	GOVERNMENT BORROWING
dc.subject	GOVERNMENT DEBT
dc.subject	GOVERNMENT DEBT MARKET
dc.subject	GOVERNMENT FINANCING
dc.subject	GOVERNMENT PAPER
dc.subject	GOVERNMENT SECURITIES
dc.subject	GROSS DOMESTIC PRODUCT
dc.subject	HEDGE FUND
dc.subject	HEDGE FUNDS
dc.subject	HOLDINGS
dc.subject	IMPLICIT SUBSIDIES
dc.subject	IMPLICIT SUBSIDY
dc.subject	INDEBTEDNESS
dc.subject	INFLATION
dc.subject	INFLATION RATE
dc.subject	INTEREST DIFFERENTIAL
dc.subject	INTEREST PAYMENTS
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL BOND
dc.subject	INTERNATIONAL BOND MARKETS
dc.subject	INTERNATIONAL CAPITAL
dc.subject	INTERNATIONAL CAPITAL MARKETS
dc.subject	INTERNATIONAL ECONOMICS
dc.subject	INTERNATIONAL FINANCE
dc.subject	INTERNATIONAL FINANCIAL INSTITUTIONS
dc.subject	INTERNATIONAL SETTLEMENTS
dc.subject	INVESTING
dc.subject	LIQUID ASSETS
dc.subject	LIQUIDATION
dc.subject	LIQUIDITY
dc.subject	LOAN
dc.subject	LOAN REPAYMENTS
dc.subject	LOAN SIZE
dc.subject	LONG-TERM CAPITAL
dc.subject	MACROECONOMIC CRISES
dc.subject	MACROECONOMIC ENVIRONMENT
dc.subject	MACROECONOMIC INSTABILITY
dc.subject	MACROECONOMIC STABILITY
dc.subject	MACROECONOMIC STABILIZATION
dc.subject	MARKET ACCESS
dc.subject	MARKET ECONOMY
dc.subject	MARKET PARTICIPANTS
dc.subject	MARKET VALUE
dc.subject	MARKET YIELD
dc.subject	MATURITIES
dc.subject	MONETARY POLICY
dc.subject	MONEY MANAGER
dc.subject	MONEY MANAGERS
dc.subject	MORAL HAZARD
dc.subject	NON-PERFORMING LOANS
dc.subject	NONPAYMENTS
dc.subject	OIL PRICE
dc.subject	OIL PRICES
dc.subject	OUTPUT LOSS
dc.subject	OUTSIDE INVESTORS
dc.subject	OUTSTANDING STOCK
dc.subject	PENSION
dc.subject	PENSION FUNDS
dc.subject	PHYSICAL ASSETS
dc.subject	POLITICAL RISK
dc.subject	PORTFOLIO
dc.subject	PORTFOLIO FLOWS
dc.subject	PORTFOLIO INFLOWS
dc.subject	PORTFOLIOS
dc.subject	PRICE CHANGES
dc.subject	PRIMARY DEALERS
dc.subject	PRIVATE BANKS
dc.subject	PRIVATE CAPITAL
dc.subject	PRIVATE CAPITAL INFLOWS
dc.subject	PRIVATE INVESTORS
dc.subject	PROMISSORY NOTES
dc.subject	PUBLIC DEBT
dc.subject	PUBLIC FINANCES
dc.subject	REAL EXCHANGE RATE
dc.subject	REAL INTEREST
dc.subject	REAL INTEREST RATE
dc.subject	REAL INTEREST RATES
dc.subject	RENEGOTIATION
dc.subject	REPO
dc.subject	REPOS
dc.subject	RESERVES
dc.subject	RETURN
dc.subject	RETURNS
dc.subject	RISK MANAGEMENT
dc.subject	SAVINGS BANK
dc.subject	SECONDARY MARKET
dc.subject	SHORT-TERM EXTERNAL DEBT
dc.subject	SHORT-TERM INTEREST RATES
dc.subject	SOLVENCY
dc.subject	SOVEREIGN BONDS
dc.subject	SOVEREIGN DEBT
dc.subject	SOVEREIGN DEBT PROBLEMS
dc.subject	SOVEREIGN LIABILITY
dc.subject	SOVEREIGN RISK
dc.subject	STOCK EXCHANGE
dc.subject	STOCK MARKET
dc.subject	STOCK MARKETS
dc.subject	SWAP
dc.subject	SWAPS
dc.subject	TAX
dc.subject	TAX COLLECTIONS
dc.subject	TAX EXEMPTIONS
dc.subject	TAX POLICY
dc.subject	TAX RATE
dc.subject	TOTAL DEBT
dc.subject	TRADING
dc.subject	TRANCHES
dc.subject	TRANSITION COUNTRIES
dc.subject	TRANSITION ECONOMIES
dc.subject	TREASURY
dc.subject	TREASURY BILL
dc.subject	TREASURY BILLS
dc.subject	TREASURY NOTE
dc.subject	UNDERLYING ASSETS
dc.title	Financial Globalization and the Russian Crisis of 1998
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	Europe and Central Asia
dc.coverage	Europe and Central Asia
dc.coverage	Europe
dc.coverage	Eastern Europe
dc.coverage	Commonwealth of Independent States
dc.coverage	Asia
dc.coverage	Russian Federation