The financial benefits of the IMF
DOI:
https://doi.org/10.13133/2037-3643/9919Keywords:
IMFAbstract
The IMF provides loans to countries in financial distress at a relatively low interest rate. In this article we calculate how much the seven largest debtors to the IMF have saved on interest payments during the Asian crisis and its aftermath. We explain how the IMF can charge these low interest rates and at what cost for creditor countries. The conditionality attached to the use of IMF resources in the form of policy measures reduces moral hazard behaviour; we argue that this is a better instrument than raising interest rates on IMF loans.
JEL Codes: F34, F32, F33, O16
References
BAKKER, A.F.P. (1996), International Financial Institutions, Longman, London/New York.
BAKKER, A.F.P. and A.J. KAETEYN (1998), "Financial crisis management and the role of the IMF: 1970-1995", in S.S. Rehman ed., Financial Crisis Management in Regional Blocs, Kluwer Academic Publishers, Boston, Dordrecht, London, pp. 299-322.
BROUWER, H.J. and A. SIPKES (2000), "From fire fighting towards sharing the responsibilities; thoughts on financial crisis management", MEB Series, no. 2000-03, De Nederlandsche Bank, February.
EICHENGREEN, B. and A. MODY (1998), "What explains changing spreads on emerging market debt: fundamentals or market sentiment?", NBER Working Paper Series, no. 6408, Cambridge.
GROUP OF SEVEN (2000), Report from the G7: Strengthening the International Financial Architecture, Fukuoka, 8 July.
IMF (1998), Financial Organization and Operations of the IMF, Pamphlet Series, no. 45, fifth edition, Washington.
IMF (1999), International Financial Statistics, various issues, Washington.
KAMIN, S.B. and K. VON KLEIST (1999), "The evolution and determinants of emerging market credit spreads in the 1990s", BIS Working Papers, no. 68, Bank for International Settlements, Basle.
J.P. MORGAN (1995), Introducing the J.P. Morgan Emerging Markets Bonds Index Plus (Market brief), New York, www.jpmorgan.com.
J.P. MORGAN (1999), Introducing the J.P. Morgan Emerging Markets Bonds Index Global (methodology brief), New York.
J.P. MORGAN (1999), Emerging Markets Bonds Index Monitor, various issues, New York.
STANDARD NEW YORK SECURITIES (1999), Emerging Market Sovereign Yield Curves, New York.
SUMMERS, L.H. (1999), "The right kind of IMF for a stable global financial system", speech at the London Business School, 14 December, Department of the Treasury, Washington.
Downloads
Published
How to Cite
Issue
Section
License
