International Initiatives to Bring Stability to Financial Integration

Inter-American Development Bank, Research Department Working Paper No. 402

23 Pages Posted: 11 Dec 2000

See all articles by Ricardo Hausmann

Ricardo Hausmann

Harvard University - Harvard Kennedy School (HKS)

Eduardo Fernandez-Arias

Inter-American Development Bank (IDB)

Multiple version iconThere are 3 versions of this paper

Date Written: March 1999

Abstract

This paper discusses a variety of proposals intended to reform global financial architecture and reduce vulnerability. The authors examine Theories of Too Much, which associate volatility with moral hazard and excessive lending, and Theories of Too Little, which alternatively assert that capital flows are inhibited by insufficient institutional frameworks in debtor nations. Later section survey proposed preventive or rescue measures such as currency reforms, international lending arrangements of last resort, and the establishment of an international bankruptcy court.

Keywords: financial architecture, financial turmoil, exchange rates, IMF, lender of last resort, moral hazard, capital flows

JEL Classification: F3

Suggested Citation

Hausmann, Ricardo and Fernandez-Arias, Eduardo, International Initiatives to Bring Stability to Financial Integration (March 1999). Inter-American Development Bank, Research Department Working Paper No. 402, Available at SSRN: https://ssrn.com/abstract=253070 or http://dx.doi.org/10.2139/ssrn.253070

Ricardo Hausmann (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

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Eduardo Fernandez-Arias

Inter-American Development Bank (IDB) ( email )

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Research Department
Washington, DC 20577
United States
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