Alumni profile

Emmanouil Sfakianakis

Thesis: Private methods to evaluate public projects. Accounting and financial approaches to assess macroeconomic perspectives of public-private partnerships, 2011

Promotor(s): Bertrand Candelon, Jaap Bos and Mindel van de Laar

Educational background
March 2002: MSc in International Money, Finance and Investment, Brunel University, London, United Kingdom
July 1999: BSc in Economic Sciences, University of Athens, Athens, Greece

Research interest
My principal area of interest concerns the effect of government guarantees as contingent liabilities arising from Public–Private Partnerships (PPPs), on debt sustainability. PPPs are generally used to circumvent spending controls and to move public investment off budget and debt off the government balance sheet. The government typically engages in (potential) future obligations, which take the form of concession payments or guarantees. Consequently, the aim of my research is twofold: a) to propose a paradigm for the proper valuation of all contractual government future obligations such as payments, fees or guarantees arising from a PPP via scenario analysis, and b) to develop a general model for the optimal risk transfer between the private and the public partner involved in a PPP.

Professional profile
2002-2011: Financial Manager. Ministry of Development, Foundation for Research and Technology, Greece.
2002-2011: Faculty member. Technological Educational Institute of Crete, Southern New Hampshire University (SNHU), Minoan International College, Greece.
Since 2011: Credit Rating Agencies Supervisor, European Securities and Markets Authority (ESMA), Paris, France

Research title:
Private methods to evaluate public projects. Accounting and financial approaches to assess macroeconomic perspectives of public-private partnerships

Main Research questions:

Question 1: Under what conditions should governments engage in certain types of PPPs, taking into account risk pricing, the direct PPP effect on the national accounts and the impact of government guarantees that arise from such contracts?

Question 2:  Realizing PPPs as a policy tool in a banking crisis incident, what are: a) the effects of these partnerships on sectoral balance sheets, b) the basic determinants of the governmental decisions to intervene during and after the crisis and c) the most efficient interventions in terms of total public exposure and neutrality?

This study covers two main determinants of public exposures: guarantees as a common element in PPP contracts and as a major crisis intervention. In the first part, I introduce the aspect of negative net cash flows that result from government PPP guarantees, which increase the probability of default (extending the debt position) of a said country. I also calculate the mid-market CDS spread and, thus, evaluate the price of the public risk in a PPP. In the second part, I analyze different aspects of PPPs as a policy tool in a banking crisis. I find that measures which concern asset and equity side management are very influential and difficult to assess. This is because macroeconomic shocks complicate the valuation of bank assets and the bank itself as a firm. Guarantees, on the other hand, can be efficiently used to tackle a crisis, since they are essential to restore market actors’ trust, while maximum public exposures are well known.


Selected publications by Emmanouil Sfakianakis