Title: Financial sector inefficiencies and coordination failures
Subtitle: implications for crisis management
Description: In a country where financial intermediation is highly inefficient (with the enforcement costs of loan contracts very high, for example), or in one experiencing great volatility and large adverse shocks in output, the likelihood of an inefficient equilibrium is great.  In East Asia it may be in the interests of both debtors and creditors to collectively reduce the face value of debt, to reduce inefficiencies in the financial sector.
Subjects: Intermediation (Finance), Debt relief
Places: East Asia, Debt