Managing the Sovereign Balance Sheet:

A Special Report

Sovereign Debt

Spreading the Risk

With dollars costly and US debt swelling, Latin America is borrowing elsewhere: Europe, Japan, and, increasingly, at home. Spreads have narrowed as Washington looks riskier. The test is whether fiscal discipline holds.

Local Currency

Home Truths

Latin American sovereigns are borrowing more in their own currencies, at home and abroad, and investors turning away from a weaker dollar are eager to buy. But local debt brings costs and risks of its own.

Sustainable Finance

Label Optional

Thematic bond issuance in Latin America more than halved last year. Debt managers say the label must now earn its keep, while investors keep funding green projects with or without one.

Reserves Management

The Price of Safety

Latin America’s central banks have built more than $900 billion in reserves to guard against the next crisis. Keeping that money safe and liquid means giving up returns, so reserve managers are looking beyond the dollar, reaching carefully for yield and bringing in outside expertise, without forgetting what the money is for.

IDB FINANCE

Rethinking the Balance Sheet

Through its newly launched Clients Financial Hub, the Inter-American Development Bank (IDB) is bringing together its sophisticated financial capabilities to collaborate with sovereign nations on longer-term balance sheet strategies. This initiative aims to optimize macro-financial value by holistically managing public assets, liabilities, and compounding financial risks across the region.