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Global Financial Crises: Institutions and Incentives
Author:
Mr. Manmohan S. Kumar
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,
Mr. Paul R Masson
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Mr. Marcus Miller null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2000: Issue 105
Language:
English
Publication Date:
01 Jun 2000
DOI:
https://doi.org/10.5089/9781451852813.001
ISBN:
9781451852813
ISSN:
1018-5941
Pages:
25
Keywords:
WP; short term; private sector; long-term debt; debtor country; emerging market; International monetary reform; lender of last resort; financial crises; short term debt; one-off debt reduction; valuation model; debt maturity; values jump; debt rollover; Liquidity; Moral hazard; Sovereign debt restructuring; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Increasing emphasis has been placed on the need for an effective lender of last resort for sovereign states and on procedures for sovereign debt restructuring to help cope with global financial crises. Where private creditors use short-term debt to check sovereign debtor’s moral hazard, there is the risk of self-fulfilling crises. In this context, we conclude that the proposal of the Meltzer Commission—for unconditional financial support, but only to states that pre-qualify—could be the source of increased instability. After discussing analogies with private sector arrangements, we compare the operations of the existing Paris Club with proposed Chapter 11 style procedures.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund