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Pacific island countries (PICs) rely on national airlines for connectivity, trade, and tourism. These airlines are being struck hard by COVID-19. Losses will weigh on public sector balance sheets and pose risks to economic recovery. With a backdrop of tight fiscal space and increasing government debt, losses in airlines are adding to fiscal risks in some PICs. This paper discusses tools to evaluate and manage the fiscal risks from national airlines in the Pacific. We present a snapshot of the current state of Public Financial Management (PFM) practices in PICs and detail the best practices. This exercise would illustrate the areas in which PICs have scope to improve their risk management with regard to national airlines. We then discuss the use of diagnostic tools and capacity development to enhance monitoring and risk management. Greater transparency and accountability in the airlines, combined with rigorous oversight, would be the first step towards improved financial management of national airlines.

Macroeconomics --- Economics: General --- Public Finance --- Budgeting --- Accounting --- Diseases: Contagious --- Fiscal Policy --- National Budget --- Budget Systems --- Governmental Loans, Loan Guarantees, Credits, and Grants --- Public Enterprises --- Public-Private Enterprises --- Public Administration --- Public Sector Accounting and Audits --- Nonprofit Organizations and Public Enterprise: General --- Health Behavior --- National Government Expenditures and Related Policies: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Public finance & taxation --- Budgeting & financial management --- Financial reporting, financial statements --- Public ownership --- nationalization --- Infectious & contagious diseases --- Fiscal risks --- Public financial management (PFM) --- Budget planning and preparation --- Financial statements --- Public enterprises --- Economic sectors --- COVID-19 --- Health --- Currency crises --- Informal sector --- Economics --- Fiscal policy --- Budget --- Finance, Public --- Government business enterprises --- Communicable diseases --- Fiji, Republic of

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This paper revisits the stabilization role of public banks and analyzes whether weak public finances may hinder this role. During the global financial crisis (GFC), public banks were widely used to counter the private credit crunch and prop up the economy. Using cross-country bank-level data for 125 advanced and developing economies for 1999–2018, the paper finds public bank lending to be less procyclical than private bank lending on average, particularly during busts. A key result, however, is that in developing economies with high public debt levels, public bank lending has been more procyclical, particularly outside of the GFC period. This finding suggests high public debt can limit the stabilization role of public banks during domestic busts, likely reflecting higher financing costs public banks face and lower subsidies they receive in economies with tighter budget constraints.

Bank credit --- Banking --- Banks and Banking --- Banks and banking --- Banks --- Credit --- Crisis Management --- Debt Management --- Debt --- Debts, Public --- Depository Institutions --- Economic & financial crises & disasters --- Finance --- Financial Crises --- Financial Institutions and Services: Government Policy and Regulation --- Financial Markets and the Macroeconomy --- Global financial crisis of 2008-2009 --- Global Financial Crisis, 2008-2009 --- Governmental Loans, Loan Guarantees, Credits, and Grants --- Industries: Financial Services --- Loans --- Macroeconomics --- Micro Finance Institutions --- Monetary economics --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Money and Monetary Policy --- Mortgages --- Public debt --- Public finance & taxation --- Public Finance --- Sovereign Debt --- State-owned banks --- India

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This paper assesses whether corporate liquidity needs in the G7 economies were met during the containment phase of the COVID-19 pandemic (February-June 2020) using various approaches to identify credit supply shocks. The pandemic crisis adversely affected nonfinancial corporate sector cash flows, generating liquidity and solvency pressures. However, corporate borrowing surged in March and into the second quarter, thanks to credit line drawdowns and unprecedented policy support. In the United States, the bond market was buoyant from the end of March onward, but credit supply conditions for bank loans and the syndicated loan market tightened. In other G7 economies, credit supply conditions generally eased somewhat across markets during the second quarter. Among listed firms, entities with weaker liquidity or solvency positions before the onset of COVID-19, as well as smaller firms, suffered relatively more financial stress in some economies in the early stages of the crisis. Residual signs of strain remained as of the end of June. Policy interventions, especially those directly targeting the corporate sector, had a beneficial effect on credit supply overall.

Macroeconomics --- Economics: General --- International Economics --- Money and Monetary Policy --- Investments: Bonds --- Industries: Financial Services --- Finance: General --- Diseases: Contagious --- Money Supply --- Credit --- Money Multipliers --- Monetary Policy --- Central Banks and Their Policies --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Governmental Loans, Loan Guarantees, Credits, and Grants --- General Financial Markets: General (includes Measurement and Data) --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Health Behavior --- Economic & financial crises & disasters --- Economics of specific sectors --- Monetary economics --- Investment & securities --- Finance --- Infectious & contagious diseases --- Financial crises --- Economic sectors --- Money --- Bonds --- Financial institutions --- Syndicated loans --- Currencies --- Corporate bonds --- Securities markets --- Financial markets --- Bank credit --- Currency crises --- Informal sector --- Economics --- Loans --- Stock exchanges --- Capital market --- Communicable diseases --- United States

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This paper assesses whether corporate liquidity needs in the G7 economies were met during the containment phase of the COVID-19 pandemic (February-June 2020) using various approaches to identify credit supply shocks. The pandemic crisis adversely affected nonfinancial corporate sector cash flows, generating liquidity and solvency pressures. However, corporate borrowing surged in March and into the second quarter, thanks to credit line drawdowns and unprecedented policy support. In the United States, the bond market was buoyant from the end of March onward, but credit supply conditions for bank loans and the syndicated loan market tightened. In other G7 economies, credit supply conditions generally eased somewhat across markets during the second quarter. Among listed firms, entities with weaker liquidity or solvency positions before the onset of COVID-19, as well as smaller firms, suffered relatively more financial stress in some economies in the early stages of the crisis. Residual signs of strain remained as of the end of June. Policy interventions, especially those directly targeting the corporate sector, had a beneficial effect on credit supply overall.

United States --- Macroeconomics --- Economics: General --- International Economics --- Money and Monetary Policy --- Investments: Bonds --- Industries: Financial Services --- Finance: General --- Diseases: Contagious --- Money Supply --- Credit --- Money Multipliers --- Monetary Policy --- Central Banks and Their Policies --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Governmental Loans, Loan Guarantees, Credits, and Grants --- General Financial Markets: General (includes Measurement and Data) --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Health Behavior --- Economic & financial crises & disasters --- Economics of specific sectors --- Monetary economics --- Investment & securities --- Finance --- Infectious & contagious diseases --- Financial crises --- Economic sectors --- Money --- Bonds --- Financial institutions --- Syndicated loans --- Currencies --- Corporate bonds --- Securities markets --- Financial markets --- Bank credit --- Currency crises --- Informal sector --- Economics --- Loans --- Stock exchanges --- Capital market --- Communicable diseases