FY 2014 net income, including surcharges, is projected at SDR 2.7 billion. Lending income remains high, while investment income continues to be constrained by the historically low global interest rates.
The Fund’s total net income for FY 2017, including surcharges, is projected at about SDR 1.7 billion or some SDR 0.7 billion higher than expected in April 2016. This mainly reflects the IAS 19 adjustment (relating to reporting of employee benefits), which is expected to contribute about SDR 0.4 billion to net income, and higher investment income. Lending income is expected to be modestly lower than the April 2016 estimates. The paper recommends that GRA net income of SDR 1.2 billion for FY 2017 (which excludes projected income of the gold endowment), be placed equally to the special and general reserve. After the placement of GRA FY 2017 net income to reserves, precautionary balances are projected to reach SDR 16.4 billion at the end of FY 2017. The paper further proposes to transfer currencies equivalent to the increase in the Fund’s reserves from the GRA to the Investment Account. In April 2016, the margin for the rate of charge was set at 100 basis points for the two years FY 2017 and FY 2018. The margin may be adjusted before the end of the first year of this two-year period (i.e., FY 2017) but only if warranted by fundamental changes in the underlying factors relevant for the establishment of the margin at the start of the two-year period. Staff does not propose a change in the margin. The projections for FY 2018 point to a net income position of SDR 0.7 billion. These projections are subject to considerable uncertainty and are sensitive to a number of assumptions.
. Robustness: Alternative Definition of Downward and Upward Shocks
Appendix. Sample Selection
1. Changes in Household Marital Status by Changes in Husband’s Earnings
2. Summary Statistics
3. Smoothing Estimates—Independent Variable: Total Shock to Earnings, Δln y H
4. Spousal Labor Participation—Income Smoothing Estimates Independent Variable—Total Shock to Earnings, Δln y H —Instrumented
5. Effect of Husband’s Earnings on Spousal Labor at the Intensive Margin—Income Smoothing Estimates
This paper reports the Fund’s income position for FY 2018 following the closing of the Fund’s accounts for the financial year and completion of the external audit. Total FY 2018 net income, including income from surcharges, amounted to SDR 0.78 billion or SDR 94 million higher than estimated in April, reflecting mainly a larger than anticipated gain reported under IAS 19 (the accounting standard for employee benefits). GRA net income for FY 2018 was about SDR 0.76 billion and has been placed to the Fund’s reserves. In accordance with decisions taken in April 2018, a net transfer of currencies amounting to SDR 0.67 billion was made in early August 2018 from the GRA to the Investment Account. The placement of the net income to the Fund’s reserves has further strengthened the Fund’s precautionary balances, which reached SDR 17.5 billion at the end of FY 2018.
, rather than merely positions on the balance sheet. However, off-balance-sheet positions can present special problems in evaluating the condition of financial institutions, because of the lack of reporting of such positions in some countries.
Earnings and Profitability
14.12 Accounting data on bank margins, income, and expenses are widely used indicators of bank profitability. Common operating ratios used to assess bank profitability include net income to average total assets (also known as return on assets [ROA]) and net income to average equity (also known
This paper theoretically and empirically investigates the role of spousal labor in buffering transitory shocks to husbands' earnings. To measure the amount of the shock that spousal labor absorbs, an instrumented cross-sectional variance decomposition is developed. Using data from the Panel Study of Income Dynamics, the paper finds that the smoothing resulting from the wives' labor response (both labor force participation and hours of work) is larger for households with limited access to credit. This finding, which is consistent with the model's prediction, indicates that because of the presence of liquidity constraints, the temporal change in family income (exclusive of wives' earnings) reinforces the substitution effect in explaining the effect of shocks to the husbands' earnings on spousal labor.
projected annual average income from the margin and service charges by about SDR 170 million a year over the medium term. However, this decline in marginincome over the medium term is partly offset by an increase in projected commitment fees in FY 2017 from the recent renewal of two arrangements under the Flexible Credit Line (FCL) and approval of a smaller arrangement under the Precautionary and Liquidity Line (PLL). 8
5. Non-lending income . Non-lending income comprises investment income, the implicit returns on the Fund’s interest-free resources, and reimbursements
This paper updates the projections of the Fund’s income position for FY 2021 and FY 2022 and proposes decisions for the current and next financial year. The Fund’s overall net income for FY 2021 is projected at about SDR 4.1 billion, higher than both the interim estimate of SDR 3.2 billion and the April 2020 estimate.