Moral Hazard And International Crisis Lending
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Moral Hazard And International Crisis Lending
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Author : Giovanni Dell'Ariccia
language : en
Publisher: International Monetary Fund
Release Date : 2002-10
Moral Hazard And International Crisis Lending written by Giovanni Dell'Ariccia and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002-10 with Business & Economics categories.
We test for the existence of a moral hazard effect attributable to official crisis lending by analyzing the evolution of sovereign bond spreads in emerging markets before and after the Russian crisis. The nonbailout of Russia in August 1998 is interpreted as an event that decreased the perceived probability of future crisis lending to emerging markets. In the presence of moral hazard, such an event should raise not only the level of spreads, but also the sensitivity with which spreads reflect fundamentals as well as their cross-country dispersion. We find strong evidence for all three effects.
A Theory Of International Crisis Lending And Imf Conditionality
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Author : Olivier Jeanne
language : en
Publisher: INTERNATIONAL MONETARY FUND
Release Date : 2008-10-01
A Theory Of International Crisis Lending And Imf Conditionality written by Olivier Jeanne and has been published by INTERNATIONAL MONETARY FUND this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008-10-01 with categories.
We present a framework that clarifies the financial role of the IMF, the rationale for conditionality, and the conditions under which IMF-induced moral hazard can arise. In the model, traditional conditionality commits country authorities to undertake crisis resolution efforts, facilitating the return of private capital, and ensuring repayment to the IMF. Nonetheless, moral hazard can arise if there are crisis externalities across countries (contagion) or if country authorities discount crisis costs too much relative to the national social optimum, or both. Moral hazard can be avoided by making IMF lending conditional on crisis prevention efforts-"ex ante" conditionality.
A Theory Of International Crisis Lending And Imf Conditionality
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Author : Olivier Jeanne
language : en
Publisher:
Release Date : 2014
A Theory Of International Crisis Lending And Imf Conditionality written by Olivier Jeanne and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
We present a framework that clarifies the financial role of the IMF, the rationale for conditionality, and the conditions under which IMF-induced moral hazard can arise. In the model, traditional conditionality commits country authorities to undertake crisis resolution efforts, facilitating the return of private capital, and ensuring repayment to the IMF. Nonetheless, moral hazard can arise if there are crisis externalities across countries (contagion) or if country authorities discount crisis costs too much relative to the national social optimum, or both. Moral hazard can be avoided by making IMF lending conditional on crisis prevention efforts - quot;ex antequot; conditionality.
Global Moral Hazard Capital Account Liberalization And The Overlending Syndrome
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Author : Mr.Eduardo Levy Yeyati
language : en
Publisher: International Monetary Fund
Release Date : 1999-07-01
Global Moral Hazard Capital Account Liberalization And The Overlending Syndrome written by Mr.Eduardo Levy Yeyati and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999-07-01 with Business & Economics categories.
The removal of government guarantees in borrowing countries does not eliminate the moral hazard problem posed by the existence of deposit guarantees in lender countries. The paper shows that, after restrictions on international capital flows are lifted, banks in low-risk developed countries benefit from lending funds captured in home markets at low deposit rates to high-risk/high-yield projects in emerging economies, even though these projects command lower expected returns. This, in turn, has a negative impact on bank profitability in the borrowing country, even when foreign funds are intermediated through domestic banks. The results are consistent with the surge in international bank lending flows that led to recent banking crises in Asia.
Moral Hazard
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Author : Juan Flores Zendejas
language : en
Publisher: Routledge
Release Date : 2021-12-30
Moral Hazard written by Juan Flores Zendejas and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-12-30 with Business & Economics categories.
Moral Hazard is a core concept in economics. In a nutshell, moral hazard reflects the reduced incentive to protect against risk where an entity is (or believes it will be) protected from its consequences, whether through an insurance arrangement or an implicit or explicit guarantee system. It is fundamentally driven by information asymmetry, arises in all sectors of the economy, including banking, medical insurance, financial insurance, and governmental support, undermines the stability of our economic systems and has burdened taxpayers in all developed countries, resulting in significant costs to the community. Despite the seriousness and pervasiveness of moral hazard, policymakers and scholars have failed to address this issue. This book fills this gap. It covers 200 years of moral hazard: from its origins in the 19th century to the bailouts announced in the aftermath of the COVID-19 outbreak. The book is divided into three parts. Part I deals with the ethics and other fundamental issues connected to moral hazard. Part II provides historical and empirical evidence on moral hazard in international finance. It examines in turn the role of the export credit industry, the international lender of last resort, and the IMF. Finally, Part III examines specific sectors such as automobile, banking, and the US industry at large. This is the first book to provide an interdisciplinary analysis of moral hazard and explain why addressing this issue has become crucial today. As such, it will attract interest from scholars across different fields, including economists, political scientists and lawyers.
Moral Hazard
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Author : Mr.Timothy D. Lane
language : en
Publisher: International Monetary Fund
Release Date : 2002-05-03
Moral Hazard written by Mr.Timothy D. Lane and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002-05-03 with Business & Economics categories.
"This Economic Issue is based on IMF Working Paper WP/00/168, 'Does IMF financing result in moral hazard?', October 2000"--Page iii.
The Moral Hazard Of Imf Lending
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Author : Peter Nunnenkamp
language : en
Publisher:
Release Date : 1999
The Moral Hazard Of Imf Lending written by Peter Nunnenkamp and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with categories.
The Mussa Theorem And Other Results On Imf Induced Moral Hazard
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Author : Olivier Jeanne
language : en
Publisher: INTERNATIONAL MONETARY FUND
Release Date : 2004-10-01
The Mussa Theorem And Other Results On Imf Induced Moral Hazard written by Olivier Jeanne and has been published by INTERNATIONAL MONETARY FUND this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004-10-01 with categories.
Using a simple model of international lending, we show that as long as the IMF lends at an actuarially fair interest rate and debtor governments maximize the welfare of their taxpayers, any changes in policy effort, capital flows, or borrowing costs in response to IMF crisis lending are efficient. Thus, under these assumptions, the IMF cannot cause moral hazard, as argued by Michael Mussa (1999, 2004). It follows that examining the effects of IMF lending on capital flows or borrowing costs is not a useful strategy to test for IMF-induced moral hazard. Instead, empirical research on moral hazard should focus on the assumptions of the Mussa theorem.
Can The Moral Hazard Caused By Imf Bailouts Be Reduced
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Author : Barry J. Eichengreen
language : en
Publisher: Centre for Economic Policy Research
Release Date : 2000
Can The Moral Hazard Caused By Imf Bailouts Be Reduced written by Barry J. Eichengreen and has been published by Centre for Economic Policy Research this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with Business & Economics categories.
Economics literature emphasizes the need to limit IMF financial rescues, but inaction is too painful. This first "Special Report" argues that institutional reforms are needed if the international policy community is to succeed in containing the moral hazard caused by IMF financial rescues.
The Current Crisis In International Lending
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Author : Jack M. Guttentag
language : en
Publisher: Washington, D.C. : Brookings Institution
Release Date : 1985
The Current Crisis In International Lending written by Jack M. Guttentag and has been published by Washington, D.C. : Brookings Institution this book supported file pdf, txt, epub, kindle and other format this book has been release on 1985 with Business & Economics categories.