Debt management strategy
Alternative borrowing strategies are compared on cost and risk across scenarios, following the medium-term debt management strategy approach.
GRA · Public Finance and Sovereign Debt
Spatial financeWhere capital meets hazard, exposure and transition
Decision analysis under uncertainty for public finance and sovereign debt
Decision analysis structures choices under uncertainty. On this platform it helps frame debt management strategy, fiscal rule design, guarantee approval and investment selection, making trade-offs and value judgements explicit for the public servants who decide.
01Naverok
Decision analysis under uncertainty for public finance and sovereign debt in five parts.
02Serlêdan
What decision analysis under uncertainty does here.
Decision analysis under uncertainty provides structured methods for choosing among options when outcomes are uncertain and objectives conflict. It makes trade-offs and value judgements explicit. In sovereign and public finance, development finance and disaster and crisis, decision analysis helps choose actions that perform acceptably across interconnected risks and uncertain futures. It clarifies when to act now and when to keep options open. The canonical description is on the STEM Commons.
Fiscal rule design
Rule options are compared for flexibility, simplicity and enforceability, with escape clauses and their triggers made explicit.
Guarantee approval
Criteria for approving guarantees weigh policy benefits against expected cost and tail risk, with each choice recorded.
03Çavdêrî bike
Uncertainty analysis.
The screen a team would use to follow this method: its measures, states and decisions. Names are examples and values are illustrative.
Uncertainty analysis
Public finance and sovereign debt · Decision analysis · Run R-4487
Sensitivity rankedGRA · Public Finance and Sovereign Debt
Total-order sensitivity
Output distribution
Têketin
| Public debt | Beta | of GDP, stated | expert elicitation |
| Gross financing needs | Uniform | of GDP, stated | expert elicitation |
| Interest to revenue | Normal | of revenue, stated | expert elicitation |
| Share of FX debt | Normal | of debt, stated | expert elicitation |
04Dane
What the method consumes.
Datasets and records used by decision analysis under uncertainty on this platform, with the role each plays and the label its values carry. Sources are listed in the source register.
| Dane | Rol | Nîşan |
|---|---|---|
| Debt portfolio data | Cost and risk | Statîstîkên weşandî |
| Scenario projections | Outcome ranges | MODELKIRÎ |
| Rule and legal texts | Constraints | Statîstîkên weşandî |
05Scenario model
Sovereign debt paths and the odds of breaching a threshold.
The distribution of debt paths, and the share above a threshold of concern at the horizon, that sovereign investors and rating analysts read from a fan chart. Teaching model with stated illustrative values, not a prediction.
- Median, 25% to 75% and 10% to 90% bands
- No shocks
Kontrol
- Debt today
- 70% of GDP
- Effective nominal interest rate
- 5.0%
- Nominal GDP growth
- 4.5%
- Primary balance
- −0.5% of GDP
- Volatility of growth
- 2.0 points
- Volatility of the interest rate
- 1.0 points
- Salên pêş
- 10 years
- Threshold of concern
- 90% of GDP
Xwendin
- Median debt at the horizon
- 78% of GDP
- Paths above the threshold at the horizon
- 2%
- Primary balance that stabilises debt
- 0.3% of GDP
Jimar, rêbaz û çavkanî
| Sal | 10% | 25% | Median | 75% | 90% |
|---|---|---|---|---|---|
| 0 | 70.0 | 70.0 | 70.0 | 70.0 | 70.0 |
| 1 | 68.9 | 69.8 | 70.7 | 71.8 | 72.6 |
| 2 | 68.9 | 70.2 | 71.6 | 73.1 | 74.2 |
| 3 | 69.3 | 70.6 | 72.4 | 74.2 | 76.1 |
| 4 | 69.4 | 71.2 | 73.3 | 75.5 | 77.2 |
| 5 | 69.6 | 71.7 | 74.1 | 76.7 | 78.4 |
| 6 | 70.0 | 72.4 | 75.0 | 77.8 | 79.7 |
| 7 | 70.7 | 73.1 | 75.7 | 78.6 | 81.0 |
| 8 | 71.2 | 73.5 | 76.8 | 79.8 | 83.3 |
| 9 | 71.7 | 74.3 | 77.6 | 80.9 | 84.1 |
| 10 | 72.0 | 75.0 | 78.3 | 82.0 | 85.6 |
Rêbaz
- Debt dynamics and the interest-growth differential Blanchard (2019), Public debt and low interest rates, American Economic Review 109
- Stochastic fan charts Celasun, Debrun and Ostry (2006), IMF Staff Papers 53
- Sovereign risk and debt sustainability framework IMF (2022), Staff Guidance Note on the SRDSF
Dane
No observed data enters this model: it runs on the teaching values set by the controls, to be replaced with a programme’s own evidence.
Li seranserê şeş stûnan, bi pêşengiya Nexus Consortium
- Ceribandin Labs
- Hatiye avakirin di Public Finance and Sovereign Debt in Foundry
- Tê ceribandin li Public Finance and Sovereign Debt in Universe
- Hatiye kodkirin di Darayî, sîgorta û aborî di Standards de
- Hatiye weşandin di Public Finance and Sovereign Debt in Reports
- Tê de tê dayîn Fakulteya Darayî û Aborî di Academy de
06Erêkirin
How results are checked.
Analyses are checked through sensitivity analysis, peer review and stakeholder scrutiny. Retrospective review compares decisions with outcomes.
| Kontrol bikin | How it is done |
|---|---|
| Options stated | All options, including the status quo, are listed |
| Trade-offs explicit | Cost-risk trade-offs are shown, not hidden in a single score |
| Robustness | Choices are tested across scenarios |
Results depend on elicited probabilities and preferences that may be biased. Deep uncertainty can make expected value comparisons misleading.
07Exposure, loss and capital
What it means for exposure, loss and capital.
The exposure, loss, scenario and capital views a risk officer, supervisor or ministry of finance would ask for, with the frameworks they report against. Structures follow supervisory and actuarial practice. Values are illustrative: never prices, ratings or advice.
Capital, solvency and fiscal indicators
The indicators a risk officer, supervisor or ministry of finance reads first on decision analysis under uncertainty for public finance and sovereign debt.
| Indicator | Unit | Who reads it | Framework |
|---|---|---|---|
| Public debt | % of GDP | Ministries of finance, IMF | Debt Sustainability Framework |
| Gross financing needs | % of GDP per year | Ministries of finance, investors | Debt Sustainability Framework |
| Contingent liabilities | % of GDP, by source | Ministries of finance | Fiscal risk statements |
| Interest to revenue | % of revenue | Ministries of finance, rating users | Public finance statistics |
| Sovereign spread | basis points over a benchmark | Investors, debt managers | Market data |
| CET1 ratio | % of risk-weighted assets | Banks, supervisors | Basel framework |
| Liquidity coverage ratio | % of stressed outflows | Banks, central banks | Basel framework |
NGFS climate scenarios · Network for Greening the Financial SystemIFRS S2 Climate-related Disclosures · ISSBTCFD recommendations · Financial Stability Board TCFDPrinciples for the effective management of climate-related financial risks · Basel Committee on Banking Supervision
09Stewardship
Who maintains the method.
Rêveberiya xetera pergalî stewards decision analysis under uncertainty for the Consortium and reviews how it is applied across platforms.
10Girêdayî
Ev rûpel li ser Konsorsiyûmê te ber bi kû ve dibe.
11Pirs
Pirs û bersiv.
What are the limits of decision analysis under uncertainty in this field?
Results depend on elicited probabilities and preferences that may be biased. Deep uncertainty can make expected value comparisons misleading.
How are results checked?
Analyses are checked through sensitivity analysis, peer review and stakeholder scrutiny. Retrospective review compares decisions with outcomes.
Are the values on this page real?
The data names, roles and checks are real descriptions of practice. The canvas shows a design of the method’s use, not a run; no result is reported here.
Where else is this method applied?
Çavdêrxaneya canonical method page lists every platform that applies it.
rêzeya Pergalên StratejîkTevkarî bike
Ji vê rûpelê delîl bidin.
rêzeya Pergalên Stratejîk is the Consortium’s quarterly publication. What you know about this subject can become evidence, a case or a correction in the next edition, credited to you and published under CC BY 4.0 where it is your own work.
Global Risks AllianceDarayiya giştî û deynê serwerîAmadebûna fînans û sîgortayêXetera pergalan û berxwedana welatan
- E-nameGateway GW-GRAJi vê rûpelê bişîninDelîl, rastkirin, doz, rêbaz, nirxandin, wergerandin an têketina profîlê. Bi nîşana vê rûpelê digihîje, ji ber vê yekê edîtorê xwediyê wê wê bistîne.
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Darayiya giştî û deynê serwerî
Bring an exposure or capital question to the Alliance.
Agahî û pirs îro vekirî ne. Pirsek referansekê distîne û gava piştî wê dide nasîn; serlêdan, drav, veqetandina hesabkirinê û tomarkirin tenê dema ku tîm, mercên wê û kapasîteya vekolînê hebin vedibin.
Hiqûqî
Belgeyên hiqûqî.
Nexşe, dane û jimarên vê malperê ji bo çarçoveyê û agahiyên giştî têne nîşandan. Ew ne şîret, ne pêşbînî û ne hişyarî ne; sînorên agahiyê di Daxuyaniyên Berpirsiyariyê û Daxuyaniyên Daneyê de hatine diyarkirin.