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International Monetary Fund

graphed in Figure 4 . Here we can summarize the migration decision by examining the earnings for each level of ability across the two countries. The left hand side of the inequality 6 is the wage/profit profile in the poor country. The right hand side is the wage/profit profile for the richer country with the cost of migration excluded. Below the point A M , the wage/profit profile of the poor country lies below the cost-adjusted opportunities in the richer country; no one below this ability level will migrate. Above A M , the opportunities in the richer country are

International Monetary Fund
This paper argues that the development of human capital in the public sector should be an important ingredient in any proposed set of “second-generation” reforms for Africa. In the post-colonial era the quality of governance has seriously declined, and the stock of human capital in the public sector has been eroded by a flight of human capital from many countries in response to compression of wages. The paper develops a simple theoretical framework to discuss these issues and the continent’s experience with foreign technical assistance in supplementing the low level of domestic human capital.
International Monetary Fund
This technical note focuses on the Austrian banking system that exhibits considerable resilience against shocks determined by stress tests. The main sources of risk lie in the credit risk arising from exposures to Central, Eastern, and Southeastern Europe (CESE) and the Commonwealth of Independent States (CIS), indirect credit risk from foreign currency lending, and credit risk from domestic lending. The Austrian banking systems exhibits ample liquidity. In-depth discussions with the larger banks show that their modeling capacities vary.
International Monetary Fund

-risk portfolios. This way, the impact shown in the tests can lose realism. 17. A similar concern applies to the assumed uniform profit development before credit-risk losses, which given the heterogeneity of the large Austrian banks’ geographic diversification, is an oversimplification . In addition, the profit profile based on bank profit net of credit losses during the Asian crisis might not be an appropriate benchmark before stress, as the structure and pre-crisis profit developments of the affected Asian banks were different from those of the large Austrian banks, and

Mr. Joaquim Vieira Ferreira Levy

share in the gains from improved performance. Banks could be reluctant to engage in such operations, however, when firms are limited in their ability to shed labor or take other measures needed to improve their performance. Banks’ reluctance will be heightened by the fact that, after FY2001, equity holdings will be marked to market. In these circumstances, banks will have an interest in ensuring a rapid turnaround of firms in which they have taken equity (or, at least, in establishing a sound profit profile for those firms), so that equity claims can be sold without

Peter Windsor, Jeffery Yong, and Michelle Chong-Tai Bell

impact assessment of the standard on insurers will be better prepared to assess any such implications. 32. In general, insurers are not expected to change their business strategy significantly during the transitional period prior to the implementation date of IFRS 17 . In the year preceding the implementation date, insurers need to value their insurance contracts as though IFRS 17 had always applied. In practice, this could result in a significantly different profit profile of insurance products underwritten by insurers. Those products would have been designed and

Peter Windsor, Jeffery Yong, and Michelle Chong-Tai Bell
The paper explores the use of accounting standards for insurer solvency assessment in the context of the implementation of IFRS 17. The paper is based on the results of a survey of 20 insurance supervisors. Overall, IFRS 17 is a welcome development but there will be challenges of implementation. Not many insurance supervisors currently intend to use IFRS 17 as a basis for solvency assessment of insurers. Perceived shortcomings can be overcome by supervisors providing clear specifications where the principles-based standard allows a range of approaches. Accounting standards can provide a ready-made valuation framework for supervisors developing new solvency frameworks.
International Monetary Fund. Monetary and Capital Markets Department

( Figure 1.3.1 , panel 4). Corporate loan books generally reprice toward the interbank rate more quickly, reflecting heightened competition with capital market finance for larger corporations. Net interest margin and profit profile . Equal amounts of net interest margin compression may also have different effects on overall profitability given the wide variation in profit margins. Germany, Italy, and Japan may be relatively more sensitive to low or negative rates because of a weaker starting point for profitability. Figure 1.3.1 , panel 5, shows the impact of a 10

International Monetary Fund. Fiscal Affairs Dept.

they refer to daily prices. Define also the concept of “range of ranges”. B. Business Restructuring 155. Business restructurings are a difficult area in TP . When functions, assets and risks are reorganized within the MNE, the business of the MNE is effectively reshaped across-borders together with the profit profile of the different affiliates. As a result, tax bases are also redistributed, although no explicit controlled transaction has taken place. However, a similar shifting of business functions or opportunities among independent parties would not