International Financial Crises and the Multilateral Response: What the Historical Record Shows

42 Pages Posted: 29 Aug 2011 Last revised: 10 Jun 2023

See all articles by Bergljot Barkbu

Bergljot Barkbu

International Monetary Fund (IMF)

Barry Eichengreen

University of California, Berkeley; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Ashoka Mody

International Monetary Fund (IMF) - Research Department

Date Written: August 2011

Abstract

We review the modern history of financial crises, providing a context for analyses of the world's recent bout of financial instability. Along with indicators of economic performance in the subject countries, we present a comprehensive description of multilateral rescue efforts spanning the last 30 years. We show that while emergency lending has grown, reliance on debt restructuring has declined. This leads us to ask what can be done to rebalance the management of debt problems toward a better mix of emergency lending and private sector burden sharing. Building on the literature on collective action clauses, we explore the idea of sovereign cocos, contingent debt securities that automatically reduce payment obligations in the event of debt-sustainability problems.

Suggested Citation

Barkbu, Bergljot and Eichengreen, Barry and Mody, Ashoka, International Financial Crises and the Multilateral Response: What the Historical Record Shows (August 2011). NBER Working Paper No. w17361, Available at SSRN: https://ssrn.com/abstract=1918690

Bergljot Barkbu (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Barry Eichengreen

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Ashoka Mody

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-9617 (Phone)
202-589-9617 (Fax)

HOME PAGE: http://www.amody.com

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