Financial safety – Salon Du Chocolat Cannes http://salonduchocolat-cannes.com/ Wed, 22 Sep 2021 14:51:36 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://salonduchocolat-cannes.com/wp-content/uploads/2021/07/icon-7-1.png Financial safety – Salon Du Chocolat Cannes http://salonduchocolat-cannes.com/ 32 32 Self employed? Building a financial safety net https://salonduchocolat-cannes.com/self-employed-building-a-financial-safety-net-2/ https://salonduchocolat-cannes.com/self-employed-building-a-financial-safety-net-2/#respond Sat, 21 Aug 2021 07:00:00 +0000 https://salonduchocolat-cannes.com/self-employed-building-a-financial-safety-net-2/ Leaving the nine-to-five and becoming your own boss is a dream for many – and in recent years, more workers than ever have taken the plunge. There are more than four million self-employed workers in the UK, while the number of small businesses grew by 8% in the second quarter of this year, compared to […]]]>

Leaving the nine-to-five and becoming your own boss is a dream for many – and in recent years, more workers than ever have taken the plunge.

There are more than four million self-employed workers in the UK, while the number of small businesses grew by 8% in the second quarter of this year, compared to the same period in 2020. However, when you switch to work self-employed, you lose the financial safety net provided by an employer if you fall ill and cannot work.

This doesn’t mean your financial well-being is at risk – you just need to protect yourself.

Plan Ahead: Katie Beardsworth has an income protection policy at the top of her to-do list

I LEARNED THE REAL VALUE OF GETTING COVERAGE

Katie Beardsworth, 35, has an income protection policy at the top of her to-do list. She knew the value of such a blanket when she was young and her mother fell ill with Ménière’s disease, then breast cancer, and was unable to work.

Katie is the independent founder of two music companies, Polyphony Arts and Mixtape Music Makers CIC, and lives with her husband and four year old son in North Tyneside. She is considering purchasing a policy to help her maintain her household income if she could not work.

Katie’s mother, Anne, claimed monthly income for 15 years on her income protection policy from Canada Life after having to stop working as a self-employed lawyer.

“Mum bought the policy because she was the primary employee and my dad was 19 years older than her and already semi-retired,” says Katie. “She wanted to be sure that we could continue to pay our bills if she got sick.

“She had expected to take care of my father in his later years, but in the end it worked the other way around.”

Save for a nest egg

The incomes of the self-employed tend to fluctuate, unlike the regular monthly paychecks that employees receive.

To help smooth out the peaks and troughs in your income, try building a nest egg.

Place the money in an easily accessible interest-bearing savings account.

Remove cover

If you are unable to work for more than a few months, the savings are unlikely to be enough to live on. After all, statutory sickness benefit is not available to the self-employed – only to those with an employer.

You will need to find another way to cover your mortgage or rent and other essential costs. This is where insurance can prove invaluable.

Critical illness coverage pays a lump sum if you are diagnosed with certain critical illnesses.

It’s also worth noting that some employers pay a lump sum to beneficiaries if you die while working there. An alternative for the self-employed is to take out life insurance.

Income protection pays part of your income if you can’t work because of poor health or injury. Most policies cover the coronavirus and the effects of the long Covid.

Maintain income

Income protection tends to pay between 50 and 70 percent of your regular income if you can’t work, either for a set period of time or until you reach retirement age.

When you are self-employed, it can be difficult to prove an accurate estimate of your income to an insurer. However, an increasing number of policies are designed specifically with fluctuating incomes in mind.

Insurer LV = last month launched a mortgage and rent coverage policy for self-employed and flexible workers, offering up to £ 2,000 per month for up to two years. You don’t need to work a certain number of hours or show proof of income to qualify, but the allowance should not be more than your housing costs.

British Friendly’s Breathing Space works the same and pays up to £ 250 per week. There is no minimum working hours requirement, but insureds must prove their income. Other policies require people to work at least 16 hours a week, but are designed for those without a regular income.

Short-term policies include Nationwide Health and Injury Insurance, Aviva Cost of Living Protection and MetLife Mortgage Protection.

What it costs

The price of income protection is based on factors such as your age, occupation, lifestyle, and health.

For example, a 32-year-old might pay between £ 14 and £ 35 per month for £ 1,000 per month of coverage until retirement, while a 45-year-old might pay between £ 20 and £ 70 per month for £ 1,500. one month of coverage, according to the LifeSearch insurance broker.

You can often reduce monthly premiums by delaying the start of policy payment. This can be a good option if you know you could cover your expenses with your savings for a few weeks or months.

HOW TO FIND FREE MONEY

Self-employed workers are just as entitled to tax relief on their pensions as employees. This means that for every £ 80 they put into a pension, the government will top it up to £ 100. Higher rate taxpayers only need to pay £ 60 into a pension for it to be supplemented up to £ 100.

But unlike employees, to whom occupational pension schemes are offered, self-employed workers must open and manage a pension themselves.

Stakeholders’ pensions must meet government requirements, such as limitation of fees charged. Another option is a self-invested personal pension.

Rosie Richard of Hargreaves Lansdown wealth manager says: “A Sipp gives you flexibility. You pay regular monthly amounts and add in payments as you can. ‘

A Lifetime Isa is another option, which offers a 25% tax-free bonus on anything you can save, up to a maximum of £ 4,000 per year. This can be a good choice for base rate taxpayers and is available to savers under the age of 40.

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.


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Self employed? Building a financial safety net https://salonduchocolat-cannes.com/self-employed-building-a-financial-safety-net/ https://salonduchocolat-cannes.com/self-employed-building-a-financial-safety-net/#respond Sat, 21 Aug 2021 07:00:00 +0000 https://salonduchocolat-cannes.com/self-employed-building-a-financial-safety-net/ “I learned the real value of income protection coverage”: Self-employed? Building a financial safety net By Rebecca Goodman, Financial Mail On Sunday Posted: 4:52 p.m. EDT, August 21, 2021 | Update: 7:05 p.m. EDT, August 21, 2021 Leaving the nine-to-five and becoming your own boss is a dream for many – and in recent years, […]]]>

“I learned the real value of income protection coverage”: Self-employed? Building a financial safety net










Leaving the nine-to-five and becoming your own boss is a dream for many – and in recent years, more workers than ever have taken the plunge.

There are more than four million self-employed workers in the UK, while the number of small businesses grew by 8% in the second quarter of this year, compared to the same period in 2020. However, when you switch to work self-employed, you lose the financial safety net provided by an employer if you fall ill and cannot work.

This doesn’t mean your financial well-being is at risk – you just need to protect yourself.

Plan Ahead: Katie Beardsworth has an income protection policy at the top of her to-do list

I LEARNED THE REAL VALUE OF GETTING COVERAGE

Katie Beardsworth, 35, has an income protection policy at the top of her to-do list. She knew the value of such a blanket when she was young and her mother fell ill with Ménière’s disease, then breast cancer, and was unable to work.

Katie is the independent founder of two music companies, Polyphony Arts and Mixtape Music Makers CIC, and lives with her husband and four year old son in North Tyneside. She is considering purchasing a policy to help her maintain her household income if she could not work.

Katie’s mother, Anne, claimed monthly income for 15 years on her income protection policy from Canada Life after having to stop working as a self-employed lawyer.

“Mum bought the policy because she was the primary employee and my dad was 19 years older than her and already semi-retired,” says Katie. “She wanted to be sure that we could continue to pay our bills if she got sick.

“She had expected to take care of my father in his later years, but in the end it worked the other way around.”

Save for a nest egg

The incomes of the self-employed tend to fluctuate, unlike the regular monthly paychecks that employees receive.

To help smooth out the peaks and troughs in your income, try building a nest egg.

Place the money in an easily accessible interest-bearing savings account.

Remove cover

If you are unable to work for more than a few months, the savings are unlikely to be enough to live on. After all, statutory sickness benefit is not available to the self-employed – only to those with an employer.

You will need to find another way to cover your mortgage or rent and other essential costs. This is where insurance can prove invaluable.

Critical illness coverage pays a lump sum if you are diagnosed with certain critical illnesses.

It’s also worth noting that some employers pay a lump sum to beneficiaries if you die while working there. An alternative for the self-employed is to take out life insurance.

Income protection pays part of your income if you can’t work because of poor health or injury. Most policies cover the coronavirus and the effects of the long Covid.

Maintain income

Income protection tends to pay between 50 and 70 percent of your regular income if you can’t work, either for a set period of time or until you reach retirement age.

When you are self-employed, it can be difficult to prove an accurate estimate of your income to an insurer. However, an increasing number of policies are designed specifically with fluctuating incomes in mind.

Insurer LV = last month launched a mortgage and rent coverage policy for self-employed and flexible workers, offering up to £ 2,000 per month for up to two years. You don’t need to work a certain number of hours or show proof of income to qualify, but the allowance should not be more than your housing costs.

British Friendly’s Breathing Space works the same and pays up to £ 250 per week. There is no minimum working hours requirement, but insureds must prove their income. Other policies require people to work at least 16 hours a week, but are designed for those without a regular income.

Short-term policies include Nationwide Health and Injury Insurance, Aviva Cost of Living Protection and MetLife Mortgage Protection.

What it costs

The price of income protection is based on factors such as your age, occupation, lifestyle, and health.

For example, a 32-year-old might pay between £ 14 and £ 35 per month for £ 1,000 per month of coverage until retirement, while a 45-year-old might pay between £ 20 and £ 70 per month for £ 1,500. one month of coverage, according to the LifeSearch insurance broker.

You can often reduce monthly premiums by delaying the start of policy payment. This can be a good option if you know you could cover your expenses with your savings for a few weeks or months.

HOW TO FIND FREE MONEY

Self-employed workers are just as entitled to tax relief on their pensions as employees. This means that for every £ 80 they put into a pension, the government will top it up to £ 100. Higher rate taxpayers only need to pay £ 60 into a pension for it to be supplemented up to £ 100.

But unlike employees, to whom occupational pension schemes are offered, self-employed workers must open and manage a pension themselves.

Stakeholders’ pensions must meet government requirements, such as limitation of fees charged. Another option is a self-invested personal pension.

Rosie Richard of Hargreaves Lansdown wealth manager says: “A Sipp gives you flexibility. You pay regular monthly amounts and add in payments as you can. ‘

A Lifetime Isa is another option, which offers a 25% tax-free bonus on anything you can save, up to a maximum of £ 4,000 per year. This can be a good choice for base rate taxpayers and is available to savers under the age of 40.

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Everything you need to know about building a financial safety net https://salonduchocolat-cannes.com/everything-you-need-to-know-about-building-a-financial-safety-net/ https://salonduchocolat-cannes.com/everything-you-need-to-know-about-building-a-financial-safety-net/#respond Wed, 18 Aug 2021 12:15:47 +0000 https://salonduchocolat-cannes.com/everything-you-need-to-know-about-building-a-financial-safety-net/ Image source: Getty Images Share this page: Achieving financial security requires good management of personal finances. However, it is not always easy. Some people find it difficult to manage the many tasks that come with it. Debt management company Lowell reviewed some of these tasks and outlined what you need to know about building a […]]]>

Image source: Getty Images



Achieving financial security requires good management of personal finances. However, it is not always easy. Some people find it difficult to manage the many tasks that come with it. Debt management company Lowell reviewed some of these tasks and outlined what you need to know about building a financial safety net.

What is a financial safety net?

Having a financial safety net means more than just creating an emergency fund for unforeseen events like illness, job loss, car repairs, or other personal tragedies. It is a well-organized set of measures that reduce the risk of losing your financial security or reaching your short- and long-term financial goals.

Simply put, this means purchasing different insurance policies depending on your personal situation, building up an emergency fund, controlling day-to-day finances, investing, and creating and following a financial plan to meet your short-term and long-term goals. long term.

What are the money management tasks that people have the most difficulty with?

According to Lowell’s research:

  • 66% of Britons find it difficult to build a financial safety net to fall back on when needed
  • 60% are unable to save for specific long-term purchases
  • 59% can’t seem to find ways to make more money from their savings and assets in the future
  • 52% find it difficult to save for experiences and activities
  • 33% are unable to meet a budget

There was still some good news. Research has found that 80% of Brits find it manageable to keep track of their regular bills and payments. In addition, 67% say they can control their spending.

The research also reflected mixed feelings about what was most important to achieving financial security. For example, 37% of Britons felt that building a financial safety net is the most important task in personal finance. That said, 24% thought it was more important to find ways to make more money from savings and assets. Another 22% thought sticking to a budget was the most important task.

How to create a financial safety net?

John Pears, Managing Director of Lowell, shares four tips to get you started.

1. Prioritize your debts

Taking out a loan can be a good financial decision. But things could get worse, especially if you don’t think much about your financial decisions or if you don’t create and strictly follow a financial plan.

Make plans to pay off your debts on time. This not only puts you in a comfortable financial position, but also allows you to have a good credit rating.

2. Start small

While it is recommended that a good financial safety net cover three to six months of your expenses, saving that much can seem overwhelming for some people. John Pears suggests considering this as your end goal. You can start saving small, and eventually it will add up.

3. Prioritize needs, wants and savings

Since 60% of Brits are unable to save for specific long-term purchases, John Pears suggests making a habit of understanding and differentiating your needs and wants. Make a list with three columns: absolute necessities, wants, and luxuries. This can help you get a clear idea of ​​how much you can save each month.

4. Do a financial spring cleaning

You will need to watch all of your entrances and exits. Where is your money going? Can you reduce your unnecessary payments or expenses? You may realize that there are things you can do without and others that have cheaper alternatives.

Could you be rewarded for your daily expenses?

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Pattie Lovett-Reid: Before you go to the polls, build a financial safety net https://salonduchocolat-cannes.com/pattie-lovett-reid-before-you-go-to-the-polls-build-a-financial-safety-net/ https://salonduchocolat-cannes.com/pattie-lovett-reid-before-you-go-to-the-polls-build-a-financial-safety-net/#respond Mon, 16 Aug 2021 10:00:00 +0000 https://salonduchocolat-cannes.com/pattie-lovett-reid-before-you-go-to-the-polls-build-a-financial-safety-net/ HUNTSVILLE, ONT. – Whether you want to go back to the polls or not, we are destined to do so in September. The timeline, many argue, makes perfect sense, as the damage to many household balance sheets over the past year has been largely repaired. Central banks around the world have printed huge sums of […]]]>

HUNTSVILLE, ONT. – Whether you want to go back to the polls or not, we are destined to do so in September.

The timeline, many argue, makes perfect sense, as the damage to many household balance sheets over the past year has been largely repaired.

Central banks around the world have printed huge sums of money, government tax programs have been overdone, and Canadians have less debt than before the pandemic. In fact, credit card balances have been paid off and many are sitting on buckets of money.

According to Statistics Canada, Canadians saved a surplus of $ 212 billion in 2020, compared to just $ 18 billion in 2019. Translated: This represents just over $ 5,000 in savings per person compared to just under $ 500 the previous year.

It’s a lot of itchy money.

The stock market has risen about 18% this year, the housing market is on fire, and although fear of the Delta variant persists, the feeling of financial euphoria has been only slightly compromised.

The government is betting that you will not put your money in the bank. Earning next to nothing in savings vehicles or guaranteed investment certificates alone will encourage Canadians to spend or even invest despite growing concerns about high valuations.

You could argue that the amount of stimulus injected into the system was excessive and while we don’t know for sure, we know it was extraordinary.

The average Canadian is probably feeling pretty well as the economy begins to warm up, immunization rates rise and the Canadian Recovery Benefit (BCR) extends beyond the election.

For small business owners who have benefited from government safety nets like loans and rent relief, the biggest issue for many is how Canadians will move from government support and savings to spending. silver.

Business owners are frustrated with trying to recruit employees to re-enter the workforce. On the surface it doesn’t seem like we have a labor shortage, we are still seeing 325,000 net jobs lost due to the pandemic. It’s not really a shortage of wages either. For the record, people have told me that they just won’t be going back to work until the summer is over and CRB is over.

Small business owners who cling to the lifeline of government support are worried about what will happen when the money dries up. Will alternatives like a five to 10 year zero interest loan program be part of the transition or even a GST exemption to encourage people to spend. More clarity is needed and business owners will listen carefully to platform plans.

What is on the horizon?

I hope Canadians recognize the unique opportunity they have to use the excess cash they have accumulated to pay down their debts. Now is the time to strengthen your household balance sheet. Be a little selfish and build yourself up financially.

In the short term, the government will continue to offer some support, central banks will continue to do their part in this low interest rate environment, and the massive accumulation of savings will provide Canadians with a unique opportunity to deploy that money wisely. .

Of course, there will be some who need more help than others. And a very real risk is that the virus will persist longer. Only a small portion of the world’s population is actually vaccinated while inflation is likely to rise.

At the end of the day, you can only control what you can actually control which is to use the huge amount of savings wisely according to your unique family financial situation.

The task of the next Parliament will not be smooth. We still have jobs to recover, sectors to rebuild and incentives to withdraw.

However, I believe that many Canadians welcome the reopening of economies and there is reason to be hopeful. Remember, you don’t have to support the economy on your own.

A more cautious approach may be to build for the future.

We have seen how the role of government has changed and its influence in society is increasing in a powerful way. At the same time, relations between the government and the country are unraveling and becoming increasingly difficult.

But we don’t need to complicate things too much. We will talk about high government debt levels, but nobody really cares about that right now, because every country in the world is in the same situation.

However, a word of warning: you cannot manage your household finances like the government does. Why? You just don’t have the same kind of safety net in place.

Now is the time to put that safety net in place.


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Newsom responds to financial / security concerns when schools reopen https://salonduchocolat-cannes.com/newsom-responds-to-financial-security-concerns-when-schools-reopen/ https://salonduchocolat-cannes.com/newsom-responds-to-financial-security-concerns-when-schools-reopen/#respond Wed, 11 Aug 2021 07:00:00 +0000 https://salonduchocolat-cannes.com/newsom-responds-to-financial-security-concerns-when-schools-reopen/ Aldon Thomas Stiles | California Black Media On August 3 in Perris, Calif., Lincoln Cooper and Fortunate Hove Cooper handed out free backpacks filled with school supplies and hand sanitizer to struggling families during a triple-digit heat wave. They were joined by a handful of volunteers, including representatives from the Moreno Valley School District. “This […]]]>

Aldon Thomas Stiles | California Black Media

On August 3 in Perris, Calif., Lincoln Cooper and Fortunate Hove Cooper handed out free backpacks filled with school supplies and hand sanitizer to struggling families during a triple-digit heat wave.

They were joined by a handful of volunteers, including representatives from the Moreno Valley School District.


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Debt counselors build financial safety net as more than half of Britons say they are struggling https://salonduchocolat-cannes.com/debt-counselors-build-financial-safety-net-as-more-than-half-of-britons-say-they-are-struggling/ https://salonduchocolat-cannes.com/debt-counselors-build-financial-safety-net-as-more-than-half-of-britons-say-they-are-struggling/#respond Tue, 10 Aug 2021 07:00:00 +0000 https://salonduchocolat-cannes.com/debt-counselors-build-financial-safety-net-as-more-than-half-of-britons-say-they-are-struggling/ Although Britons thought it was the most important financial task to accomplish, 66% find it very difficult to build a financial safety net. Almost a quarter of Britons (22%) also struggle to manage their loans and debts, and one in ten (9%) cannot keep up with their regular bills and payments. Many of us struggle […]]]>

Although Britons thought it was the most important financial task to accomplish, 66% find it very difficult to build a financial safety net.

Almost a quarter of Britons (22%) also struggle to manage their loans and debts, and one in ten (9%) cannot keep up with their regular bills and payments.

Many of us struggle with the many tasks that lead to financial security According to The Debt Management Group Lowell who conducted the latest research.

A financial safety net is an amount of money that you use in an emergency or unforeseen circumstance.

It is recommended that each person have one for unforeseen expenses, such as car repairs, boiler repairs, vet fees, or even in the event of your job loss.



A cash safety net of three to six months of spending is suggested

Debt experts say a good safety net can cover three to six months of your expenses, but that’s a challenge for many people.

If you’re already struggling with personal finance issues, this, aside from saving for a big purchase and finding ways to make more money from your assets, can seem like an impossible task.

Four ways to start building a safety net

John Pears, Managing Director of Lowell, offered his step-by-step advice on how to get the most from your money:

  • Put Your Debt First – Paying off your excess debt is the best way to put yourself in a comfortable financial position where you can consider saving for emergencies and getting the most out of your money.
  • Start small – although a jar of spending three to six months seems pretty overwhelming, this should be considered your end goal. Even amounts that seem small at first will add up over time, and before you know it you’ll be much further along than you might think.
  • Prioritize your needs, wants, and savings – when figuring out how much you can save, get in the habit of understanding your needs and wants. List your absolute needs, wants, and luxuries. Then you can get a very clear idea of ​​what you can put away each month.
  • Do a financial spring cleaning – take a look at all your in and out and see if you can cut any, combine payments, or cut anything. See where most of your money is going each week and see where you need to cut back

What are the money management tasks that people have the most difficulty with?

  • Build a financial safety net to fall back on if necessary – 66%
  • Savings for specific long-term purchases – 60%
  • Finding ways to make more money from savings and assets in the future – 59%
  • Save for experiences and activities – 52%
  • Stick to a budget – 33%

On a positive note, 80% of Brits find it ‘easy’ to keep track of their bills and regular payments, and 67% of people say they can track their spending well.

Research has also shown that Britons believe that putting in place a financial safety net is the most important personal finance task people should do (37%), followed by 24% who believe that find ways to make more money from savings and assets and 22% who believe they are on a budget is the most important.

Get the latest news on savings and benefits straight to your inbox. Sign up for our weekly Money newsletter here.


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Safety First: Expanding the Global Financial Safety Net in Response to COVID‐19 – Gallagher – 2021 – Global Policy https://salonduchocolat-cannes.com/safety-first-expanding-the-global-financial-safety-net-in-response-to-covid%e2%80%9019-gallagher-2021-global-policy/ https://salonduchocolat-cannes.com/safety-first-expanding-the-global-financial-safety-net-in-response-to-covid%e2%80%9019-gallagher-2021-global-policy/#respond Mon, 09 Aug 2021 08:31:06 +0000 https://salonduchocolat-cannes.com/?p=81 COVID-19 highlights the need to strengthen the global financial safety net The outbreak of COVID-19 is a strong human tragedy that rapidly became an economic tragedy as well. As the world’s health systems are under strain to combat the virus, the present ‘safety net’ to back up the financial system is inadequate to the task. […]]]>

COVID-19 highlights the need to strengthen the global financial safety net

The outbreak of COVID-19 is a strong human tragedy that rapidly became an economic tragedy as well. As the world’s health systems are under strain to combat the virus, the present ‘safety net’ to back up the financial system is inadequate to the task. It is still too early to estimate the overall damage, but the immediate economic and financial impacts are unprecedented and on a global scale. A high degree of uncertainty and an initial lack of coordinated policy responses intensified market panic and volatility, resulting in a flight for safety that led to the largest outflow of portfolio capital from emerging market and developing economies (EMDEs) in history and a global shortage of dollar liquidity.

The COVID-crisis has threatened the stability of the global financial system and put to test the institutions and mechanisms that were established to support countries facing liquidity crises. The crisis has shown that the protection that the current multi-layered Global Financial Safety Net (GFSN) – comprising the nations’ foreign reserves, central banks’ bilateral swap lines, and financial resources of global financial institutions, particularly of the International Monetary Fund (IMF) and the regional financial arrangements (RFAs) – can provide is insufficient to deal with a crisis of current proportions.

While the central banks and governments of most advanced economies have been able to utilize the maximum space for monetary and fiscal policies, most EMDEs have limited room for fiscal and monetary expansion and at the same time struggle with the highly destabilizing consequences of the sudden reversal of capital flows and some of them from the downgrades from credit-rating agencies. Furthermore, the vast majority of EMDEs have no access to the swap arrangements that the advanced economies provide.

Since the crisis began to unfold, EMDEs experienced a large initial withdrawal of close to $100 billion, and over 100 countries have gone to the IMF for support. Although private capital markets for EMDEs have opened up since mid-April, access has been very uneven, with only countries that are considered to be ‘credit-worthy’ by private creditors being able to issue bonds on good conditions. Separate estimates by the IMF and the United Nations Conference on Trade and Development (UNCTAD) see the need for EMDEs to be at least $2.5 trillion (Georgieva, 2020; UNCTAD, 2020; Wheatley, 2020). The currently available resource base of the IMF and the RFAs only amounts to $1.5 trillion, with a maximum of $700 billion to somewhat less than $1 trillion available to EMDEs, and are thus inadequate to meet the needs of these countries.

In this short article, we discuss the shortcomings of the current system and develop a set of immediate and intermediate proposals to expand and reform the GFSN that will help both the crisis response as well as the development of a more robust and functional global financial system. Our immediate proposals are to expand central bank swap networks, issue at least $500 billion in special drawing rights, improve the IMF’s precautionary and emergency facilities, establish a multilateral swap facility at this institution, expand RFAs, coordinate capital flow management measures, enable debt restructuring and relief, and request that credit-rating agencies stop making downgrades during the emergency. The structural reforms that we propose are to agree on a quota reform at the IMF, create an appropriate sovereign debt restructuring regime, expand surveillance activity, and adopt IMF governance reform and strengthen its relations with all agents of the GFSN.

These emergency measures and broader reforms will help maintain exchange rate stability, and lessen sovereign debt burdens, which in turn will help maintain the financial stability and fiscal space necessary for EMDEs to face the effects of the pandemic and continue to transition toward more socially inclusive and lower carbon economic development.

The limits of the GFSN

The GFSN is a multilayered set of instruments and institutions that create a loose patchwork across the world. A well-functioning GFSN needs to excel at surveillance, preventive and precautionary measures, and liquidity provision and balance of payments support. It is widely held that the GFSN is still highly incomplete, and that the current crisis has exposed many of the limitations in the system.

The first concern is that the GFSN lacks the resources to stem the current crisis. Bilateral currency swaps from the Federal Reserve of the United States are useful to maintain the dollar system and typically amount to short term lending to central banks, but only two EMDEs (Brazil and Mexico) have access to such swaps.1 IMF and RFA lending is typically for reserve management for exchange rate management, balance of payments support, and other goals.

Listed in Table 1, the regional and multilateral components of the GFSN hold roughly $1.5 trillion in capital. The GFSN is thus just 1.8 per cent of global GDP and 0.4 per cent of total global financial assets as measured by the Financial Stability Board (FSB, 2020). Table 1 shows that just under $700 billion is available for EMDEs. That amount could rise to as much as $971 billion, but it is unlikely. Members of the IMF can borrow up to a cumulative 435 per cent of their share and even more under an ‘exceptional access’ lending window such as what was granted to Argentina in 2018. If all EMDEs requested their maximum potential funding from the IMF (and no OECD members except Chile, Colombia, Mexico, South Korea, and Turkey did) that would amount to roughly $1.1 trillion in potential lending, but the IMF could only fund $971 billion given its current capital base (IMF, 2020a). With the immediate need for EMDEs totaling $2.5 trillion, the GFSN falls significantly short in being able to perform its most basic function.

Table 1.
RFA and IMF resources and EMDE’s share in lending capacity

Capital/swap amount

(billion USD)

EMDE’s share of lending capacity
International Monetary Fund 971.1 388.5
European Stability Mechanism 90.6 0.0
Chiang Mai Initiative Multilateralization 240.0 201.6
Contingent Reserve Arrangement 100.0 85.0
European Financial Stabilisation Mechanism 67.7 0.0
EU Balance of Payments Facility 54.1 0.0
North American Framework Agreement 14.0 0.0
Eurasian Fund for Stabilization and Development 8.5 8.5
Arab Monetary Fund 3.6 4.7
Latin American Reserve Fund 2.9 4.7
European Macro-Financial Assistance Facility 2.0 0.0
South Asian Association for Regional Cooperation 2.0 2.0
Total 1,556.5 695.0

Note:

  • Capital/swap amount (billion USD) compiles the paid-in capital of the IMF and the RFAs across the GFSN. The EMD share of lending capacity identifies the EMD share of current lending capacity across RFAs and the IMF as permitted under their charter agreements, though this is constrained by the lending capacity of these institutions.

  • Source: Compiled by authors drawing from Mühlich et al. (2020), Kring and Gallagher (2019), Henning (2020), IMF (2020), and the annual reports of various institutions.

The GFSN has not evolved by design, but rather as a patchwork of institutions and instruments, several of which have arisen in response to the unmet needs of the system that a sequence of crises has made evident. A well-functioning GFSN would need a coordinated set of engagements that can identify financial instability and risk (commonly referred to as ‘surveillance’), and provide precautionary and preventive instruments, as well as facilities to mitigate financial instability when it comes.

These functions are performed across four layers of the global system. Table 2 provides an illustrative list of the four layers of the GFSN and the major instruments used across the spectrum. Table 3 exhibits some of the gaps and limitations in the system.

Table 2.
Instrumentation across the global financial safety net
Precautionary Platforms Liquidity Provision
National governments Micro- and macro-prudential regulation Fiscal and monetary policy
Foreign currency reserves Foreign currency reserves
Capital flow management measures
Bi-lateral arrangements Bi-lateral swap arrangements Activation of bi-lateral swaps
Bi-lateral credit facilities Drawing on credit facilities
RFAs CMIM swap arrangements CMIM activation of swaps
CRA swap arrangements CRA activation of swaps
NAFA swap arrangements NAFA activation of swaps
SAARC swap arrangements SAARC activation of swaps
ArMF credit facilities
ESM credit facilities
FLAR credit facilities
EFSD credit facilities
Multilateral facilities IMF Flexible Credit Line IMF Stand-by Arrangements
IMF Precautionary and Liquidity Line IMF Extended Fund Facility
  • Acronyms: ASEAN + 3 Macroeconomic Research Office (AMRO), Chang Mai Initiative Multilateralisation (CMIM), Arab Monetary Fund (ArMF), European Stability Mechanism (ESM), Contingent Reserve Arrangement (CRA), North American Framework Agreement (NAFA), Latin American Reserve Fund (FLAR), South Asian Association for Regional Cooperation (SAARC), Eurasian Fund for Stabilization and Development (EFSD), Bank for International Settlements (BIS), Financial Stability Board (FSB).

  • Source: Compiled by authors drawing from Kring and Gallagher (2019), Henning (2020).

Table 3.
Gaps and limitations in the global financial safety net
Surveillance Precautionary platforms Liquidity provision
National governments

Limited attention to national-global links

Lack of reliable information

Inadequate currency reserves

Weak efficacy of prudential measures

Limited efficacy of CFMMs

Limited efficacy and availability of fiscal/monetary policy

Lack of level and efficacy of currency reserves

Bi-lateral arrangements Largely absent of formal surveillance activity

Asymmetric and uncertain availability

Ex-ante conditionality concerns

Asymmetric and uncertain availability

Ex-ante conditionality concerns

RFAs

Incomplete geographic coverage

Narrow thematic coverage

Limited level and coverage of swaps

Linkages to the IMF

Limited level and coverage of swaps

Linkage to the IMF

Multilateral facilities

Uneven quality of IMF surveillance

Narrow thematic coverage (IMF surveillance)

Limited attention to global-country specific links (FSB/BIS)

Absence of multilateral swap facility

Inadequate level of IMF resources available

Stigma attached to IMF credit lines

Ex-ante conditionality of IMF facilities

Inadequate level of IMF resources available

Lack of IMF voice and representation by EMDs

Pro-cyclical conditionality of IMF programs

Stigma & mixed outcomes of IMF programs

  • Source: Compiled by authors.

While the GFSN is often described as having ‘layers’, that does not imply that countries sequentially move from one layer to the next, nor that they have all four layers at their disposal. Indeed, many countries only have the IMF, while a small handful have access to all four. With that important point in mind, the first layer of the GFSN is the realm of national governments and central banks that provide their own surveillance, precautionary measures, and contingency policies. Because the major source of financial instability comes in the form of external shocks related to volatile capital flows, climate change, and now pandemics, national level surveillance is sufficient by itself to identify sources of fragility that will impact their economies. Beginning in the 1990s, after the crises and controversial IMF responses in East Asia and elsewhere, many countries decided to ‘self-insure’ their economies by accumulating foreign exchange reserves and using capital flow management measures (CFMMs) and macroprudential policies (as they pertain to foreign exchange markets) to prevent and mitigate crises at a national level (Gallagher, 2015; Ghosh et al., 2012; Ocampo, 2017). These policies can have very positive results and give nations the most autonomy in their route to prevent and mitigate crises, but research has shown that their effectiveness can diminish over time for a variety of reason. What is more, by purchasing trillions of low-yield developed countries’ assets, this insurance strategy amounts to an enormous transfer of wealth from EMDEs to more advanced economies at a high opportunity cost to productive domestic investment (Ocampo, 2017).

Certain nations also have access to bilateral credit lines and swaps, which form the second layer of the GFSN (Mehrling, 2015). The United States Treasury is home to the Exchange Stabilization Fund that disbursed numerous loans and swaps to Mexico in the 1990s, and Japan and Russia provided bilateral credit to neighboring countries during the same period (Grimes, 2009; Henning, 1999; Katada, 2001; Schneider and Tobin, 2020). The crisis of 2008–09 and the succeeding Eurozone crisis led to a significant use of swap lines with no ex post conditionality. In addition, the People’s Bank of China has signed numerous swap agreements with other countries since 2008.

Rather than hegemonic provision of public goods, many countries are concerned that the allocation of bilateral swaps is uncertain, incomplete, and asymmetric. They are concerned that they do not have access to this type of support – either because they do not qualify given ex ante conditionality criteria or more arbitrary geopolitical criteria (Aizenman and Pasricha, 2010; Ocampo, 2017; Volz, 2016). The joint announcement in March 2020 by the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank to enhance the provision of liquidity among each other via the standing US dollar liquidity swap line arrangements is an important contribution to the management of the crisis, but also illustrates the fact that the vast majority of economies are excluded from similar lines of defense. The Federal Reserve subsequently established temporary dollar liquidity-swap lines with nine additional central banks, including two EMDEs. The more recent move by the Federal Reserve to establish a foreign and international monetary authorities’ facility (FIMA Repo Facility) is also a step in the right direction, but will largely benefit just a handful of EMDEs also holding significant reserves.

A third layer of support is provided by RFAs that take the form of either swap arrangements (such as the Chang Mai Initiative Multilateralisation (CMIM), and the BRICS Contingent Reserve Arrangement) or credit facilities (such as the Latin American Reserve Fund, the European Stability Mechanism, and the Arab Monetary Fund). While RFAs are more flexible and have more ‘ownership’ over their policies, they lack adequate levels of capital and those that require a parallel IMF program are not sufficiently used because of the general stigma associated with IMF conditionality (McKay et al., 2011). Thus, with the exception of the Eurozone’s extensive use of the European Stability Mechanism (ESM) and some countries’ use of the Latin American Reserve Fund, FLAR (which has no formal conditionality), the other RFAs remained dormant during the recent crises in favor of swaps or self-insurance (Kring and Grimes, 2019). Although many of the RFAs, especially CMIM (through the ASEAN + 3 Macroeconomic Research Office (AMRO)) and FLAR, have developed sophisticated surveillance activities that are more attuned to understanding how capital flows will impact regional stability, their limited mandates, size, and capacity have prevented them from expanding their purview to examine new shocks associated with climate change and health pandemics (Grabel, 2017). What is more, a large number of countries across the world simply lack any access to an RFA at all (Mühlich and Fritz, 2018; Volz, 2016).

Most nations in need only have the fourth and only multilateral layer, the IMF. IMF surveillance efforts have been assessed by its own Independent Evaluation Office to be lacking in that they failed to anticipate the instabilities preceding the 2008–09 financial crisis (IMF-IEO, 2014, 2019). The IMF was strengthened after the 2008–09 crisis, including through the creation of a range of multilateral surveillance instruments. Only recently has the IMF focused on global climate change, with landmark issues of the Fiscal Monitor and the Global Financial Stability Report on this issue (IMF, 2019a, 2019b). The IMF has also started to consider pandemic and health security as a risk factor in Article IV consultations, but such risks have not yet been formally integrated into its country analysis (World Bank Group, 2019). The IMF is only now starting to officially incorporate these important sources of financial shocks into its analyses of the financial systems of member countries.

The IMF created a host of precautionary facilities that were potentially more flexible, including the Flexible Credit Line and the Precautionary and Liquidity Line (IMF, 2017b). These new facilities received little use because of the strict ex ante conditions involved in qualifying for the first of them (Marino and Volz, 2012). Thus, nations often had no choice but to resort to traditional facilities, particularly the stand-by arrangements, which remained highly conditional, frequently include contractionary macroeconomic policies, and have a mixed record when it comes to crisis recovery and social outcomes (Kentikelenis et al., 2016).

There are also significant concerns about voice and representation of all members of the IMF and delays to regular quota reviews (Gao and Gallagher, 2019; Ocampo, 2017). It took six years for the 2010 quota increases and redistributions of votes at the IMF to be adopted. Further, it is worrisome that efforts to follow-up with new reforms on quotas and votes were delayed until 2023. Although the IMF is tasked to follow a ‘doctrine of economic neutrality’ (Swedberg, 1986), case studies and statistical analysis have found that lending decisions (including loan conditionality) often reflected the geopolitical and economic interests of G7 countries in general and the US in particular. Looking at the IMF, Thacker (1999), Stone (2002, 2011) and Copelovitch (2010a, 2010b)find this pattern, whether looking at countries known to be important to the US at the time, or analyzing key United Nations General Assembly votes. Dreher et al. (2009, 2010, 2015) find this favoritism extends to IMF lending, and Dreher et al. (2018) are able to link it specifically to UN Security Council voting records.

Proposals for expansion and reform of the GFSN

The G20 and IMF have previously called on members and beyond to strengthen the GFSN and ‘promote a resilient international monetary and financial system, including by reconsidering elements of the IMF’s lending toolkit and deepening collaboration with regional financing arrangements.’ (G2019, 2019; IMFC, 2019). To this end, we propose eight immediate measures and a four-point agenda to address the structural gaps of the current GFSN:

  1. Broaden the coverage of Federal Reserve swaps. In response to the outbreak of the pandemic, the Federal Reserve took immediate action, first lowering the funding cost of its swap lines signed with five other central banks, and then extending the dollar swap lines to nine more central banks in order to meet the surging demand for dollar liquidity. Such emergency assistance would certainly help lessen strains in global dollar funding market for some specific jurisdictions. In the immediate term, the swap lines of the Federal Reserve should be extended to at least the People’s Bank of China, the world’s largest trading partner but also spread to others EMDEs.
  2. Issue at least $500 billion of IMF Special Drawing Rights (SDRs). The IMF board should approve an allocation of SDRs of at least $500 billion. Close to two-fifths of such an allocation would enhance the international liquidity of EMDEs, which are the primary users of SDRs. A decision should also be adopted by which high-income countries would lend to the IMF the SDRs that they do not use, to enhance the Fund’s lending capacity.
  3. Improve the IMF’s precautionary and emergency facilities. It is also important to improve the access and flexibility of existing tools, such as the IMF Flexible Credit Line and Precautionary and Liquidity Line for tackling potential balance of payments pressures. Even more importantly, access and funding for the emergency facilities – the Rapid Financing Instrument (RFI) and Rapid Credit Facility (RCF) – must be improved to face the urgent needs arising from the pandemics, but also from commodity price shocks, conflict situations and natural disasters.
  4. Establish a multilateral swap facility at the IMF. Equally important is for the IMF to establish a multilateral swap facility that would be open and unconditional to all countries. This has been elaborated on by the IMF staff, with earlier versions have been proposed by experts and the G-20 Eminent Persons Group (de Gregorio et al., 2018; IMF, 2017a; Truman, 2010). This could be funded by an SDR allocation, again with countries not using their allocations making the funds available to the IMF to finance such a facility. In 2017, a proposal for such a facility was rejected in the IMF Board by a minority of creditor shareholders that have a disproportionate share of voting rights at the IMF, but it is ‘shovel ready’ in design.
  5. Increase the resources and geographic coverage of RFAs. The existing resources of the RFAs in EMDEs need a stepwise increase, and a geographic expansion. Many countries lack access to a variety of swap and credit lines at the regional and multilateral level. The most glaring gap in RFAs is Africa. Though a number of African countries have signed on to a new African Monetary Fund, many countries are yet to sign on and then they need to ratify the articles of agreement. This proposal and specific design is also ‘shovel ready’ and in need of ratification and funding (Dagah et al., 2019). This should be done immediately. Significant gaps also exist in South and Central America and the Caribbean, Eurasia, and South Asia. Also, and notably, some G20 countries, like Argentina and Turkey, are not covered by RFAs at all.
  6. Coordinate capital flow management measures (CFMMs). As the world puts these other measures in place, EMDEs should regulate the outflow of capital in order to protect their balance sheets and exchange rates – and to moderate inflows during ‘surges’ of capital. These ideas date back to the origins of the IMF and are implied in the articles of agreement and are now becoming mainstreamed in economics and international institutions (Gallagher, 2015; Helleiner, 1990). With the IMF’s ‘institutional view’ on CFMMs adopted in Helleiner (2012), such an approach is now accepted as part of the toolkit for situations like the one we are in, and should be acted upon when necessary (Gopinath, 2019; IMF, 2012).
  7. Debt restructuring and relief. Even with a rapid and significant expansion of liquidity and balance of payments support to EMDEs, a substantial amount of debt will need to be written off. The IMF has already noted that Argentina – the recipient of the largest IMF program – will need a significant debt restructuring (IMF, 2020b), and the World Bank and IMF have called for bi-lateral debt relief for the poorest countries. UNCTAD (2020), suggests that $1 trillion in developing country debt will need to be alleviated in 2020 across multi-lateral and bi-lateral debt classes. The United Nations has agreed upon a resolution setting forth a set of principles for sovereign debt restructuring processes that can be built upon (United Nations, 2015).
  8. Credit-rating agencies must stop making downgrades during the emergency. Downgrades by credit-rating agencies are generating additional pressures on capital flight from emerging economies. They should pause as markets settle and prices adjust so as not to accentuate the present volatility and uncertainties. In the meanwhile, credit-rating agencies should also work on their business models to improve their surveillance of financial market volatility and further integrate vulnerabilities associated with pandemics and climate change.
After these immediate measures, in the intermediate term over the course of the next eighteen months, leaders will also have to address the following structural gaps in the GFSN:

  1. Quota Reform at the IMF and expansion of RFA resources. The resources available through the GFSN need to be expanded. Members of the IMF and RFAs should provide significant new resources for new facilities. Quota-based increases should form the core of IMF resource mobilization, and the 16th Quota Review should be adopted in 2020, and mandate stepwise quota increases and a redistribution of quota and voting shares. Existing and newly created RFAs should be scaled up in a stepwise manner as well.
  2. Create an appropriate Sovereign Debt Restructuring Regime. The international financial architecture still lacks an adequate workout system for the restructuring and reprofiling of sovereign debts, as has come painfully clear in the recent case of Argentina (IMF, 2020b). Existing mechanisms to renegotiate sovereign debts with private creditors have improved but are inadequate because of the multiplicity of debt contracts, some of which are still not subject to collective action clauses. A global institutional mechanism to renegotiate sovereign debts should be put in place as soon as possible. EMDEs were already close to unsustainable debt levels due to the surge in private capital flows in recent years, and many of those debts will be unsustainable with the massive capital flight and exchange rate depreciation that have taken place.
  3. Expand surveillance activity. All GFSN institutions should expand their surveillance activities to focus on the new drivers of shocks, particularly spillovers generated by the monetary policies of advanced countries, volatile short-term capital flows, cross-border digital asset movements, global climate change, and health pandemics. In particular, it is necessary to highlight the importance of surveillance of macroeconomic and financial conditions that generate the risk of crises.
  4. Governance reform. The IMF and other parts of the GFSN should reform their governance structures and cooperate in a manner that provides global public goods without jeopardizing national policy sovereignty. The IMF, with its broad membership, remains the global multilateral body that provides predictability to liquidity needs in the global economy. Echoing G20 principles, the IMF should work with central banks and RFAs in a manner that respects the roles, independence and decision-making processes of each institution, taking into account regional specificities in a flexible manner (G2019, 2019; McKay et al., 2011; Report of the G20 Eminent Persons Group on Global Financial Governance, 2018; Volz, 2013). These institutions should cooperate closely during crises while allowing for complementarity and diversity of approaches to governance, surveillance, program design, and conditionality over the longer run. They should create mechanisms for greater international policy coordination managing capital flows across regions and between EMDEs and advanced economies (Ostry et al., 2012). Moreover, the IMF should work to ensure that trade and investment regimes also allow ample policy space for national efforts and international cooperation on capital flow management. Such treaties increasingly restrict the capacity of countries to manage capital flows. The IMF has recognized that ‘these agreements in many cases do not provide appropriate safeguards or proper sequencing of liberalization, and could thus benefit from reform to include these protections’ (IMF, 2012, p. 8; Gallagher et al., 2019).

Obstacles to reform efforts

While the G20 and the IMF have long called for reforms to the GFSN, reform and even substantive engagement between the different layers of the GFSN has been slow to materialize. The current COVID-19 crisis presents both an urgent need for immediate reforms to the GFSN to mitigate the ravaging economic effects of the pandemic and an opportunity to strengthen, expand, and better integrate the various components of crisis finance. But just because a crisis has created an opening, it does not mean that substantive change will materialize.

At the moment, the current US Administration has underestimated the nature and effects of the pandemic and has taken several steps to weaken or abandon multilateralism. Likewise, Europe has grappled with internal strife in the form of Brexit and underwent conflictive negotiations until reaching an agreement on regional cooperation in July. In short, both domestic and regional political cleavages and diverging views on how to respond to COVID-19 at the national level provide significant obstacles to multilateral efforts. That said, the demands generated by the crisis create both an opening for reform of the GFSN and the salient need to bolster and better coordinate crisis financing entities.

Some areas of much-needed reform may have greater chance of success than others. The effects of the COVID-19 crisis on public finances and public debt sustainability will inevitably force a long-overdue discussion on the restructuring and reprofiling of sovereign debts, providing an opportunity for making progress in this policy area. Also, the rapid and hands-on reaction of the IMF during the current crisis, and the fact that its emergency support came without conditionality, helped dispel concerns of crisis-affected countries about engaging with the Fund. It may also open the door to closer collaboration between the IMF and RFAs. The magnitude of the economic effects of the pandemic has also led the IMF to realize that it needs to expand surveillance activity by monitoring risks beyond the traditional macro-financial risks it has focused on thus far. In particular, the crisis has highlighted how weak health and social systems undermine economic resilience, which are therefore also becoming increasingly recognized as being macro-critical for the Fund’s work. Other areas or reform, including quota and governance reform, will see little progress unless the major shareholder countries, and the US administration in particular, adopt a more cooperative stance to multilateral governance.

Concluding remarks

The COVID-19 crisis has highlighted the underlying weaknesses of the GFSN. The GFSN needs to be enhanced through measures that will enable the world to contain crisis like COVID-19, to save lives and jobs, calm markets, and steer finance toward a more adept, sustainable, and inclusive world economy. The world shares a common but differentiated responsibility to prevent destructive unilateral economic actions that prevent other nations from realizing these common goals, while maintaining the right to pursue national development strategies and advancing global public goods (Gallagher and Wright, 2020).

The IMF, RFAs, and national entities need to align these efforts with the SDGs, the Addis Ababa Action Agenda on Financing for Development, and the Paris Agreement on Climate Change. Despite recognized improvements in the number of conditionalities explicitly required in IMF programs, in particular the possibility of countries under the programs to preserve spending ‘floors’ for social programs, IMF conditionalities still carry a stigma because of their pro-cyclical nature and social impacts. While the academic literature on the impacts of IMF programs on economic growth is somewhat mixed, there is overwhelming evidence in the literature that IMF conditionality is correlated with worsening educational spending, health systems, inequality and environmental quality (IMF, 2018; Kentikelenis et al., 2016). The flexible response of the IMF to the COVID-19 crisis and the recognition of the crucial importance of functioning health and social systems for an effective response to pandemics may indicate a shift in IMF policies in this respect, and may lead to a weakening of the stigma associated with borrowing from the IMF. More broadly, the crisis may herald new thinking among the various stakeholders of the GFSN to better prepare for the challenges of the future, which will inevitably differ from those of the past.

Our proposals for financing for the immediate liquidity needs of the world economy can enable EMDEs to reduce exchange rate instability, limit indebtedness, and maintain the fiscal and financial space to attack the virus while transitioning the world economy to a more sustainable and inclusive one. COVID-19 does not discriminate between rich and poor countries, but the GFSN does, in that its coverage is uneven and disproportionately supports developed countries. These inequities mean that the COVID-19 induced financial crisis is likely to disproportionately impact EMDEs. At the same time, the crisis presents an opening for bold thinking, innovation, and action. All solutions have trade-offs and limitations, but these proposals constitute an ambitious ‘whatever it takes’ strategy that is aligned with the SDGs, the Addis Ababa Action Agenda and the Paris Agreement.


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Race insurance a financial safety net for runners | On the run https://salonduchocolat-cannes.com/race-insurance-a-financial-safety-net-for-runners-on-the-run/ https://salonduchocolat-cannes.com/race-insurance-a-financial-safety-net-for-runners-on-the-run/#respond Thu, 15 Jul 2021 07:00:00 +0000 https://salonduchocolat-cannes.com/race-insurance-a-financial-safety-net-for-runners-on-the-run/ While one of the best motivations for sticking to a consistent running schedule is to sign up for a race in the coming months, this strategy has its drawbacks. While some of us are perfectly happy to plan months in advance, we may also have friends, employers, and family members who can come up with […]]]>

While one of the best motivations for sticking to a consistent running schedule is to sign up for a race in the coming months, this strategy has its drawbacks.

While some of us are perfectly happy to plan months in advance, we may also have friends, employers, and family members who can come up with compelling alternatives at the last minute.

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Financial independence and financial security are very important to entrepreneurs, says Wingify’s Paras Chopra https://salonduchocolat-cannes.com/financial-independence-and-financial-security-are-very-important-to-entrepreneurs-says-wingifys-paras-chopra/ https://salonduchocolat-cannes.com/financial-independence-and-financial-security-are-very-important-to-entrepreneurs-says-wingifys-paras-chopra/#respond Wed, 09 Jun 2021 07:00:00 +0000 https://salonduchocolat-cannes.com/financial-independence-and-financial-security-are-very-important-to-entrepreneurs-says-wingifys-paras-chopra/ According to Paras Chopra, Founder and President of the SaaS startup Wingify, “Wealth” and “money” are related but are two different things. He explains that if wealth means wanting things or things needed to improve life, money would mean “numbers in your bank.” “I think real wealth is indistinguishable from a good life,” he says. […]]]>

According to Paras Chopra, Founder and President of the SaaS startup Wingify, “Wealth” and “money” are related but are two different things. He explains that if wealth means wanting things or things needed to improve life, money would mean “numbers in your bank.”

“I think real wealth is indistinguishable from a good life,” he says.

Paras reveals that his first money-making experience was when he was 12 or 13 years old when he used to create software in Visual Basic and C ++ and then make it available online.

Representation image

It was the early days of the internet, and during that time someone contacted Paras to make some custom modifications to the software, and he got $ 100 for it.

“From there I felt that doing something I love, which is coding and programming, and trying to make money with that, is how I want to imagine it. my own future. So I got into startups as a result of that thought, ”he says.

Paras was inspired by reading books by Paul Graham and interviews with the founders of PayPal, Yahoo and Google. He was inspired by them after realizing how they could turn their ideas into money.

However, like any other entrepreneur, Paras also faced his fair share of challenges. He tried to get into the startup ecosystem during his college days and failed three times. He reveals that Wingify was his fourth or fifth attempt at entrepreneurship.

“I think the joy is learning what it is to be an entrepreneur, what it is to be a leader, to be a manager, and money, frankly, has always been a consequence. secondary. The reason I’m saying this is if money had been the main motivator, I imagine I would have gone ahead, and we would have raised money, but we don’t have it. made. We had more money to come and we knew what to do with it. I think it’s a measure of wealth in a personal and professional context. It’s not just the amount of money, but it’s the amount of money relative to your needs,” he says.

Founded in 2009, Wingify’s flagship product includes a website testing platform product, VWO.

Invest money as a founder

Speaking about starting a business and creating money, he explains that creating money is not a trivial thing but requires a lot of commitment, intellect and passion.

When asked about handling the money coming from Wingify, Paras explains that the first priority is always the growth of the business and always has set aside a certain amount of income to be fed back into the business.

“As an entrepreneur, you have to realize that the company you work in is the biggest contributor to your future net worth, because whatever you invest in, maybe stocks or real estate, you don’t have as much control over the appreciation of the value of these assets as you do with your own business. So Wingify is absolutely my number one factor in building wealth. That’s why it would always have priority in terms of growth, ”he said.

However, Paras also advises against going to extremes to invest in a business where you have to take out loans or go into debt to run it. He explains that financial independence and financial security are very important for entrepreneurs.

“If something is fundamentally broken and you haven’t understood the fit between the product and the market, let’s say if your customer acquisition channels aren’t profitable, throwing money at them is wasting. money. So, you have to think like an investor first and if it makes sense to invest in the business, investd, if it’s profitable, if it’s not, then you have to take care of your financial independence, ”he says.

Paras says he always made sure he had enough money not to worry psychologically about his safety.

To find out more, listen to the podcast here

Remarks –

02:09 – Meaning of “True Wealth” for him

05:15 – “The creation of money is obviously not a trivial matter. It requires a significant amount of commitment, intellect, passion, etc.

05:40 – Wingify: 4th attempt to try to set up a startup

06:59 – “If money was a primary motivator, I would have gone ahead and we would have raised money, but we didn’t. “

10:15 – Definition of financial wealth

13:29 – # 1 mistake when investing: real estate

15:31 – “Hunting safe assets like FD early on is a big mistake.”

18:34 – Have 70 to 80% of assets on the stock markets

22:56 – “Diversification is the only free lunch in finance.

24:02 – Advice to a 25-year-old on “spending wisely”

26:31 – “If you have to constantly work in your life to live, then you will have all kinds of restrictions. “

27:55 – ULIPs: “The more complex something seems, the more risky it is. “

31:23 – Invest in index funds

34:37 – His ideal investment: to be passive, not to speculate, and to grow faster than inflation

35:50 – Treasure to read: the annual letters of Warren Buffett

37:17 – Focus on what’s new at Wingify

39:59 – Following the principle of in-depth work


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Flipkart announces health, financial and safety benefits to support sellers amid Covid-19 crisis https://salonduchocolat-cannes.com/flipkart-announces-health-financial-and-safety-benefits-to-support-sellers-amid-covid-19-crisis/ https://salonduchocolat-cannes.com/flipkart-announces-health-financial-and-safety-benefits-to-support-sellers-amid-covid-19-crisis/#respond Fri, 07 May 2021 07:00:00 +0000 https://salonduchocolat-cannes.com/flipkart-announces-health-financial-and-safety-benefits-to-support-sellers-amid-covid-19-crisis/ New Delhi: Flipkart has extended various initiatives to hundreds of thousands of MSMEs, small vendors, artisans, weavers and craft partners, to help them overcome the challenges of the current scenario. These efforts range from financial benefits, health and safety benefits, to support through existing vendor policies and information provided to vendors on the platform. As […]]]>

New Delhi: Flipkart has extended various initiatives to hundreds of thousands of MSMEs, small vendors, artisans, weavers and craft partners, to help them overcome the challenges of the current scenario.

These efforts range from financial benefits, health and safety benefits, to support through existing vendor policies and information provided to vendors on the platform.

As part of the fee waivers, Flipkart has waived storage fees to limit the impact any seller may have on their inventory that is processed through Flipkart’s fulfillment centers. The company is also waiving cancellation fees until May 31, 2021, for orders that may have been canceled due to blockages in various states.

Flipkart, in an official statement, said it will bear 100% of the COVID insurance premium extended to all sellers, which covers their hospitalization and consultation between 50,000 to 3 Lakhs.

Jagjeet Harode, Senior Director and Marketplace Manager at Flipkart, said: “During these testing periods, we are constantly striving to support our vendor partners who are facing immense operational challenges due to the pandemic. . As a democratic market, we want to make sure that our partner seller lakhs are able to keep going and keep the economic engine running. With the financial and health security of their families in mind, we have put in place these initiatives that will give them the respite they so badly need to keep their businesses active. “

In light of the current situation, the company has further updated its existing policies to protect 3,000,000 salespeople and their businesses. Flipkart has extended the Seller Protection Fund (SPF) window where sellers must claim the SPF on returned products – from 14 normal days to 30 days now.

The company says it will further relax policies and performance metrics for its vendors to ensure their business growth is unaffected by state-led bottlenecks.

Flipkart also claims to provide easier access to working capital. Under this, all sellers affected by pandemic-related disruptions will have an option of early settlement (next day payment) at no additional cost. The corresponding transaction costs will be borne by Flipkart.

In addition to these efforts, Vriddhi – Walmart’s supplier development program in India, in partnership with Flipkart – hosted webinars for small businesses with the aim of spreading knowledge and sharing best practices for keeping people safe. their workforce and provide relevant demand information to help them stay operational during this second wave. The Vriddhi program is opening e-institutes across India to help train MSMEs to scale and enter global supply chains. In these difficult times, Vriddhi provides small businesses with telecare and advice in addition to information modules on insurance awareness and digital marketing to ensure business continuity.

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