As recent experience demonstrates, loans and liquid resources often allow countries to delay reform. The IMF can help sustain market discipline through the publication of timely, accurate information on economic, financial, and political developments. Accurate information permits lenders and investors to make informed decisions. The IMF has a major role in improving the quality and increasing the quantity and timeliness of country data. Publication of reports of IMF missions and the IMF's recommendations is a welcome development.
Improved information reduces uncertainty and improves lenders' decisions.
Release of information encourages reform and permits investors to make continuous marginal adjustments instead of rushing to exit when anticipations change quickly. Further, improving information and opening the economy to foreign banks reduces reliance on renewable, short-term loans. Part of the solution for reducing or eliminating moral hazard lies in letting foreign financial institutions compete in the local market. They would hold both assets and liabilities denominated in local currency, so they would be less exposed to exchange rate risk. And foreign banks would bring expertise in risk management and act as relatively safe havens if a crisis occurs.