Sovereign Advisory

The goal of this course is to provide an holistic view of the issues facing sovereigns across the world at different times and under different circumstances. It intends to supply the analytical tools needed to solve applied problems facing governments and state sector institutions. These problems lie usually in the intersection of various fields of knowledge, as for example fixed income, corporate finance, monetary and fiscal policy. The course relies on both lectures, that will provide the theoretical background for each topic, and on illustrative case studies and practical exercises. Students are expected to come prepared to class to take the most out of the discussions. When relevant, policy makers, who dealt with issues in practice, will be invited to class to illustrate how specific issues where dealt with.

The course will address the following questions: what should be included in the sovereign balance sheet and why? On which risks should we focus when we look at the sovereign balance sheet and how should we measure them? How to design a sovereign debt management strategy? What is the importance of building a liquid sovereign bond market? How should Sovereign Wealth Funds be incorporated into the analysis? How are Sovereign Wealth Funds designed and why? Does the framework change for the case of resource rich countries? Why do some countries experience sovereign debt crisis? How do various political and economic conditions influence how a country deals with a sovereign crisis? How to design macro prudential regulation to minimize the risks of a financial crisis? How can the sovereign debt situation influence the health of the banking sector? How have sovereigns dealt with financial crisis and its consequences? What is the importance of building medium term fiscal plans for debt management? How does debt management interact with monetary policy? How should governments monitor state owned enterprises? All these issues will be illustrated with recourse to case studies linked to real situations.