Cover Image

Evaluating Sovereign Disaster Risk Finance Strategies : A Framework

This paper proposes a framework for ex ante evaluation of sovereign disaster risk finance instruments available to governments for funding disaster losses. The framework can be used by governments to help choose between different financial instrume...

Full description

Bibliographic Details
Main Authors: Clarke, Daniel, Mahul, Olivier, Poulter, Richard, Teh, Tse Ling
Language:English
en_US
Published: World Bank, Washington, DC 2016
Subjects:
CONTINGENT LIABILITIES
LINE OF CREDIT
HOLDING
LIABILITY
DEVELOPING COUNTRIES
FINANCIAL MANAGEMENT
RISK PROFILE
VALUATION
INTEREST
RATE OF RETURN
CLAIM PAYMENT
RISK NEUTRAL
CONTINGENT LIABILITY
MORAL HAZARD
INSURANCE PRODUCT
INTEREST RATE
OPTION
EXCHANGE
STRATEGIES
SERVICES
FINANCIAL CRISES
REPAYMENTS
PUBLIC SERVICES
PORTFOLIO
BONDS
MARKET INSTRUMENTS
LOAN
DEBT REPAYMENTS
PRICING
PROJECTS
RESERVE FUND
GOVERNMENT ACCOUNTS
CLAIM PAYMENTS
SAVING
RESERVE
INTERNATIONAL BANK
INSTRUMENTS
SAFETY NETS
BUDGET
PRESENT VALUE
SAVINGS
CURRENCY
NATURAL DISASTER
DISBURSEMENT
INSURANCE MARKETS
FINANCES
FIXED COSTS
INTEREST RATES
INSURANCE PRODUCTS
NATURAL DISASTERS
FINANCIAL INSTITUTIONS
MARKETS
DEBT
INTERNATIONAL DEVELOPMENT
CATASTROPHE BONDS
RETURN
LENDERS
LIQUID MONEY
LOANS
RESERVES
GOVERNMENT FINANCING
FINANCE
BANK POLICY
INFRASTRUCTURE
BANKS
EXPENDITURE
TRANSACTIONS
SOVEREIGN DEBT
OPPORTUNITY COST
GOVERNMENT BUDGET
OPPORTUNITY COSTS
FINANCIAL TRANSACTIONS
FINANCIAL INSTRUMENT
MINISTRIES OF FINANCE
SOVEREIGN RISK
FUTURE
VALUE
PRIVATE FINANCIAL SECTOR
BANK
RETURNS
FINANCIAL INSTRUMENTS
CREDIT
BUDGETS
COLLATERALIZATION
PUBLIC BUDGET
GOVERNMENT EXPENDITURE
SAFETY NET
PRICE RISK
REPAYMENT
EXPENDITURES
FISCAL YEAR
INSURANCE PREMIUM
MARKET
DEFAULT
LOCAL CURRENCY
LEVY
INSURANCE
INSURANCE PREMIUMS
CONTINGENT DEBT
GOVERNMENT DEBT
INVESTMENT
RISK
BOND
INDIRECT COST
FINANCIAL MARKETS
INSTITUTIONAL DEVELOPMENT
MONEY MARKET
MONEY MARKET INSTRUMENTS
BORROWING
INVESTMENTS
RISK MANAGEMENT
LENDING
SWAPS
INSURANCE COMPANIES
INSTRUMENT
GOVERNMENTS
LIABILITIES
ARREARS
BOND PREMIUM
ECONOMIC CONDITIONS
INVESTING
Online Access:http://documents.worldbank.org/curated/en/2016/06/26510520/evaluating-sovereign-disaster-risk-finance-strategies-framework
http://hdl.handle.net/10986/24637
Description
Summary:This paper proposes a framework for ex ante evaluation of sovereign disaster risk finance instruments available to governments for funding disaster losses. The framework can be used by governments to help choose between different financial instruments, or between different combinations of instruments, to achieve appropriate and financially efficient strategies to fund disaster losses, taking into account the risk of disasters, economic conditions, and political constraints. The paper discusses the framework in the context of a hypothetical country, with parameters selected to represent a disaster-prone small island state. The paper shows how a mix of instruments can be chosen to minimize the economic opportunity cost given the underlying disaster risk faced and prevailing economic and financial conditions.

Similar Items