Global Financial Crises Institutions and Incentives

26 Pages Posted: 15 Feb 2006

See all articles by Manmohan Kumar

Manmohan Kumar

International Monetary Fund (IMF) - Research Department

Paul R. Masson

International Monetary Fund (IMF) - Research Department; The Brookings Institution

Marcus H. Miller

University of Warwick - Department of Economics; Institute for International Economics; Centre for Economic Policy Research (CEPR)

Date Written: June 2000

Abstract

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 Commissionfor unconditional financial support, but only to states that pre-qualifycould 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.

Keywords: International monetary reform lender of last resort financial crises

JEL Classification: F31 F32 G20 G33

Suggested Citation

Kumar, Manmohan and Masson, Paul R. and Miller, Marcus H., Global Financial Crises Institutions and Incentives (June 2000). IMF Working Paper No. 00/105, Available at SSRN: https://ssrn.com/abstract=879678

Manmohan Kumar (Contact Author)

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

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Paul R. Masson

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

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Washington, DC 20431
United States

The Brookings Institution ( email )

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Marcus H. Miller

University of Warwick - Department of Economics ( email )

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United Kingdom
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+44 24 7652 3032 (Fax)

Institute for International Economics

1750 Massachusetts Avenue, NW
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United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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