INVESTIGATION THEME

“Impact of the financial crisis on debt management”

Coordination: CANADA

Impact of the financial crisis on debt management

In 2008, Canada proposed to lead an investigation paper on the impact of the financial crisis on debt management.

A brief outline was given by Canada to the Secretariat in 2009.

Since that proposal was made by Canada, the INTOSAI created last year a new task force: the Task Force on Global Financial Crisis (TFGFC).

Task Force and WGPD

Considering the work presently performed by the Task Force Canada has already recommended to the Secretariat

that the investigation theme proposed in 2008 be reconsidered to assess potential overlap between the WGPD paper and the numerous theme papers being prepared by the TFGFC.

The TFGFC should complete its work over the coming months.

Task Force and WGPD We know that the roles for SAIs is being reviewed and

discussed in many of the theme papers presently produced by the TFGFC in the context of the global financial crisis.

The impact on public finance and public debt will likely be reported.

A subgroup has been created to make the link between the TFGFC and the WGPD.

That subgroup might be looking more specifically at public debt issues.

Task Force and WGPD Canada recommends we postpone the decision to

pursue the theme paper proposed by Canada with the support of Brazil until the TFGFC completes its work later this fall.

This will allow the WGPD to reposition the paper and make sure it will be valuable and useful for SAIs.

Based on the work performed by the TFGFC, this could mean the theme paper will be delayed or even cancelled.

Brazil agrees with this strategy

INVESTIGATION THEME

“Information systems related to debt management”

Coordination: BRAZIL

Information systems related to debt management

In our last meeting, Brazil assumed the leadership of the WGPD investigation theme

“Information systems related to debt management”.

The Governmental Macro-evaluation Secretariat, is the unit at the Brazilian SAI responsible for carrying out the technical activities related to our new mission within WGPD.

First steps Literature review

Understand the problem from an overall perspective

Networking Access institutions and professionals

IMF World Bank Unctad

Framework and strategy

Framework and strategy

Goal: To help WGPD develop guidance regarding the audit of

information systems related to debt management that can be useful for all the INTOSAI community

Acknowledgment: Public debt management activities vary considerably

among countries. Thus, requirements for IT systems also vary.

Framework and strategy

Develop guidance to help SAIs to identify their countries debt diversification level

Specify IT system requirements for different country debt diversification level

Develop guidance on what to audit regarding different country debt diversification level

Is this framework useful for other areas related to debt management?

For example, human resources.

Debt management changing role

Increasing Complexity and Choice

Concessional bilateral & multilateral (e.g. IDA)

Limited Domestic: Captive sources Short dated

Domestic market

expansion

International capital markets

Contingent liabilities (risk management)

Integrated risk management

across government

Non-concessional multilateral

Access to derivatives Financial services

for other parts of government

Source: ANDERSON, P. (2005) “The Changing Role of the Public Debt Manager”; June, 2005.

Available at: http://r0.unctad.org/dmfas/docs/Anderson_june2005.pdf.

How to classify?

3 levels of diversification? Low: only bilateral debt Middle: multilateral and domestic market High: risk analysis, complex debt management strategy

What to look at a first glance? Country debt composition Debt market and country insertion

Primary market Secondary market

Approach

Can this approach be useful for other subgroups within WGPD?

Should we go on? Anyone would join?