International financial rescues and debtor-country moral hazard
By: by Prasanna Gai and Ashley Taylor.
Contributors: Taylor, Ashley.; Bank of England.
Series: Working paper,; no. 217; Working paper (Bank of England : Online) ;; no.217.
Publisher: Bank of England
Published: 2004
Place of publication: London
Language: eng
Format: Electronic resource
Subjects: International Monetary Fund.; Debts, External -- Developing countries.; Moral hazard -- Developing countries.
Description: "In this paper the question of whether recent international policy initiatives to facilitate financial rescues in emerging market countries have influenced debtors' incentives to access official sector resources is examined. A country's systemic importance is highlighted as a key characteristic that drives access to official sector finance. The effect of these policy initiatives on IMF programme participation is estimated using a pooled probit model. The safety net implied by policy changes to permit exceptional access is shown to have a greater marginal impact on the use of official sector resources, the more systemically important the debtor country is. The paper's results can be interpreted as offering some support for the presence of debtor-country moral hazard"--Bank of England web site.
Notes: Includes bibliographical references.
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