Toward a Lender of First Resort /

Toward a Lender of First Resort /

If interest rates (country spreads) rise, debt can rapidly be subject to a snowball effect, which becomes self-fulfilling with regard to the fundamentals themselves. This is a market imperfection, because we cannot be confident that the unaided market will choose the "good" over the "...

Full beskrivning

Bibliografiska uppgifter
Huvudupphovsman: Cohen, Daniel
Övriga upphovsmän: Portes, Richard
Materialtyp: Tidskrift
Språk:English
Publicerad: Washington, D.C. : International Monetary Fund, 2006.
Serie:IMF Working Papers; Working Paper ; No. 2006/066
Länkar:Full text available on IMF
LEADER 02028cas a2200253 a 4500
001 AALejournalIMF008972
008 230101c9999 xx r poo 0 0eng d
020 |c 5.00 USD 
020 |z 9781451863260 
022 |a 1018-5941 
040 |a BD-DhAAL  |c BD-DhAAL 
100 1 |a Cohen, Daniel. 
245 1 0 |a Toward a Lender of First Resort /  |c Daniel Cohen, Richard Portes. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2006. 
300 |a 1 online resource (26 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a If interest rates (country spreads) rise, debt can rapidly be subject to a snowball effect, which becomes self-fulfilling with regard to the fundamentals themselves. This is a market imperfection, because we cannot be confident that the unaided market will choose the "good" over the "bad" equilibrium. We propose a policy intervention to deal with this structural weakness in the mechanisms of international capital flows. This is based on a simple taxonomy that breaks down the origin of crises into three components: confidence (spreads and currency crisis), fundamentals (real growth rate), and economic policy (primary deficit). Theory then suggests a set of circumstances in which a lender of first resort would be desirable. The policy would seek to short-circuit confidence crises, partly by using IMF support to improve ex ante incentives. Theory also illuminates the potential role of collective action clauses in reducing the risk of self-fulfilling debt crises. 
538 |a Mode of access: Internet 
700 1 |a Portes, Richard. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2006/066 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2006/066/001.2006.issue-066-en.xml  |z IMF e-Library 

Liknande verk