Credit Default Swaps on Trial

Further opportunities for boosting access were provided by engagement with SWAps.

They may provide valuable evidence for policy dialogue and scaling up, including for use in PRSs and SWAps.

UNICEF also engaged with national SWAps in all 30 countries that are using this instrument in the social sectors.

(b) To encourage, both within the Ibero American community and in third countries, debt for education swaps and other social investments

Options for lower debt burdens on Governments of heavily indebted developing countries include debt cancellation and debt swaps for sustainable development.

In this regard, delegates asked for more information on the UNICEF role within SWAps and the EFA Fast Track Initiative (FTI).

UNFPA also suggested that new partnerships and funding arrangements such as sector wide approaches (SWAps) raised issues of attribution and accountability.

UNICEF will continue to work within a variety of national partnership frameworks, including sector coordination forums, SWAps and joint programmes under UNDAF.

UNCTAD should continue its work in the area of debt, including the study of the application of debt for equity swaps for development.

Debt relief, debt swaps or debt cancellation could offer important means for mobilizing resources for accelerating progress towards the water and sanitation goals.

Several delegates strongly endorsed the national context for the focus areas, including such instruments as sector wide approaches (SWAps), PRSs and national budgets.

Delegations said that the leadership role played by UNICEF helped to ensure that child protection issues were reflected in CCAs, UNDAFs, PRSs, and SWAps.

The UNGEI will intensify efforts to influence decision making and budgets in favour of gender equity and equality in national education policies, SWAps and programmes.

Governments may be able to mobilize funding through debt swaps, where donors exchange debt for local currency investment in environmental protection, such as waste water treatment.

Overnight index swaps show that the market forecasts for probability of risings of interest rate of the Bank of Canada in October rise from 76.46 to 78.27 .

Innovative financial mechanisms such as the International Finance Facility, carbon off setting, emissions trading, international taxation and the potential of debt for nature swaps should be further explored.

(b) Ensuring the enhanced and systematic involvement of UNICEF in both PRSs and SWAps, in conjunction with national counterparts, the World Bank and United Nations partners, to influence strategic investment decisions

And banks remain non transparent, and thus at risk. We still don t know the full extent of linkages among financial institutions, including those arising from non transparent derivatives and credit default swaps.

SWAps are being used by countries to fill major gaps in national policies for early childhood or to deal with new challenges, such as the impact on young children of HIV AIDS.

The situation is aggravated by the market in credit default swaps, which is biased in favor of those who speculate on failure. Being long CDS, the risk automatically declines if they are wrong.

Girls' education has faced multiple challenges arising from emergencies, the prevalence of HIV AIDS, deepening poverty and persistent disparities, while opportunities have been created by partnership initiatives, sectoral reforms and sector wide approaches (SWAps).

However, questions were asked about partners' contributions to planned targets quality education national ownership institutional development of educational systems in the context of SWAps excluded children, minorities, and children with disabilities and the United Nations Girls' Education Initiative.

Efforts to put a compact between developing and donor countries into practical effect have resulted in poverty reduction strategies (PRSs) and SWAps which are beginning to trigger greater investments for the Millennium Development Goals on education and gender parity.

At country level, UNICEF will continue to play an active role through country coordination mechanisms in supporting governments to position immunization and other child survival interventions centrally within national instruments such as PRS, SWAps, and medium term expenditure frameworks.

Speakers were pleased with the establishment of focus area 5, first call for children in policies, laws and budgets, and its intention to promote and assess progress on children's rights and focus on UNICEF engagement with PRSs and SWAps.

Each of these commodities is an important input for major corporations. Surely there is at least as much natural demand for commodity bonds as there is for credit default swaps and some of the bizarrely complicated derivatives that are currently traded!

Its banks and financial institutions were not tempted to buy the mortgage supported securities and credit default swaps that ruined several Western financial institutions. Among the drivers of growth, domestic capital formation retained much of its momentum from preceding years.

Many delegations welcomed harmonized modalities for resource transfers, as they would reduce transaction costs for government counterparts, and also welcomed reforms being made to allow UNICEF to participate in forms of resource pooling arrangements, including sector wide approaches to development (SWAps).

(f) To encourage exploring innovative mechanisms to comprehensively address the debt problems of developing countries, including middle income countries, and countries with economies in transition such mechanisms may include debt for sustainable development swaps, or multi creditor debt swap arrangements, as appropriate

(f) To encourage exploring innovative mechanisms to comprehensively address the debt problems of developing countries, including middle income countries, and countries with economies in transition such mechanisms may include debt for sustainable development swaps, or multi creditor debt swap arrangements, as appropriate

Rather than imposing the costs of the ECB s and EFSF s losses on European taxpayers, the banks creditors could give up some of their claims in exchange for receiving shares from the banks owners. Debt equity swaps rescue the banks without rescuing their shareholders.

This was part of a wave of deregulation that swept away Franklin Roosevelt s promise to chase the money changers from the temple. Clinton also refused to regulate credit default swaps, and the US Securities and Exchange Commission allowed banks to triple their leverage.

In its role as advocate, facilitator and sectoral coordinator in emergencies, UNICEF will encourage balanced approaches in SWAps and other sectoral plans by encouraging modifications in programme designs and budgets, and by facilitating the development of partnership frameworks that pool competencies and resources.

It was also said that UNICEF should support both short and long term strategies in response to HIV AIDS promote the inclusion of HIV AIDS in development tools such as the PRSPs, SWAps and national budgets and increase expenditure on HIV AIDS.

Banks and other financial institutions had doubts about the value of various asset backed securities on their own balance sheets and on those of potential counterparties. No one knew the real value of credit default swaps and of the various tranches of collateralized debt obligations.

The architects of the Chiang Mai Initiative attempted to finesse the problem by requiring countries that draw more than 30 of their swaps to negotiate a program with the IMF. Ironically, the Treaty for the Establishment of a BRICS Contingent Reserve Arrangement contains exactly the same provision.

This renewed international cooperation was intended, of course, to protect the global financial system. But contributing money also means having a say, and the BRICS no surprise are pressing their demand for voting reform in the IMF, and are increasingly offering currency swaps to economically troubled countries.

Debt equity swaps would be a much better way to recapitalize the banks. Rather than imposing the costs of the ECB s and EFSF s losses on European taxpayers, the banks creditors could give up some of their claims in exchange for receiving shares from the banks owners.

vi. Emphasize the urgent need for the international community to adopt an effective, comprehensive, equitable, durable, and development oriented solution to the debt problems of developing countries, particularly through total debt cancellation and increased concessional financial flows, as well as through debt swaps for sustainable development.

In Pakistan, we have adopted several modalities to do this, such as utilizing foreign grant assistance to retire our most expensive past debt, interest rate swaps, issuing property titles to the poor and the creation of a human development fund through private and public sector partnership.

In that regard, during the previous high level meeting on financing for development, Egypt, based on its experience, proposed, in this very Hall, that debt swaps for development be used as an effective and innovative tool to address one of the major challenges confronting developing countries.

Now, we are told, ASEAN 3 has achieved another great breakthrough, the so called Chiang Mai Initiative Multilateralization (CMIM), aimed at turning its bilateral swaps and credits into a regional reserve pool. The goal was set in 2005, and last month ASEAN 3 finance ministers negotiated the details.

Such swaps should help Asian countries to cope with currency turmoil in the wake of a Fed policy reversal. But they remain untested and, given their relatively small volumes, cannot reassure markets or provide adequate emergency support to crisis countries, especially in the event of large scale systemic shocks.

UNICEF will also work to leverage resources from the Global Fund to Fight AIDS, Tuberculosis and Malaria, the World Bank's Multi Country HIV AIDS Programme for Africa and bilateral sources, as well as through PRSs and SWAps, to improve coverage, care and prevention for children, adolescents and women.