Credit risk dynamics of infrastructure investment : considerations for financial regulators / Andreas A. Jobst
Resource type: Ressourcentyp: Buch (Online)Book (Online)Language: English Series: World Bank E-Library Archive | Policy research working paper ; 8373Publisher: Washington, D.C. : World Bank Group, Office of the Managing Director and Chief Financial Officer, March 2018Description: 1 Online-Ressource (circa 151 Seiten) : IllustrationenSubject(s): Genre/Form: Additional physical formats: Erscheint auch als: Credit Risk Dynamics of Infrastructure Investment: Considerations for Financial Regulators. Druck-Ausgabe Washington, D.C : The World Bank, 2018DOI: DOI: 10.1596/1813-9450-8373Online resources: Summary: Prudential regulation of infrastructure investment plays an important role in creating an enabling environment for mobilizing long-term finance from institutional investors, such as insurance companies, and, thus, gives critical support to sustainable development. Infrastructure projects are asset-intensive and generate predictable and stable cash flows over the long term, with low correlation to other assets; hence they provide a natural match for insurers' liabilities-driven investment strategies. The historical default experience of infrastructure debt suggests a "hump-shaped" credit risk profile, which converges to investment grade quality within a few years after financial close-supported by a consistently high recovery rate with limited cross-country variation in non-accrual events. However, the resilient credit performance of infrastructure-also in emerging market and developing economies-is not reflected in the standardized approaches for credit risk in most regulatory frameworks. Capital charges would decline significantly for a differentiated regulatory treatment of infrastructure debt as a separate asset class. Supplementary analysis suggests that also banks would benefit from greater differentiation, but only over shorter risk horizons, encouraging a more efficient allocation of capital by shifting the supply of long-term funding to insurersPPN: PPN: 1022179144Package identifier: Produktsigel: ZDB-1-WBA | ZDB-110-WBONo physical items for this record
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