IMF in a World of Private Capital Markets / Barry Eichengreen, Kenneth Kletzer, Ashoka Mody.

Format:

Book

Author/Creator:

Eichengreen, Barry J., author.

Kletzer, Kenneth, author.

Mody, Ashoka, author.

Series:

Working Paper Series (National Bureau of Economic Research) ; Number w11198.

Working Paper Series (National Bureau of Economic Research) ; Number w11198

Language:

English

Subjects (All):

International finance--Econometric models.

International finance.

Bank loans--Econometric models.

Bank loans.

Physical Description:

1 online resource (34 pages) : illustrations.

Place of Publication:

Cambridge, Massachusetts : National Bureau of Economic Research, 2005.

Summary:

The IMF attempts to stabilize private capital flows to emerging markets by providing public monitoring and emergency finance. In analyzing its role we contrast cases where banks and bondholders do the lending. Banks have a natural advantage in monitoring and creditor coordination, while bonds have superior risk sharing characteristics. Consistent with this assumption, banks reduce spreads as they obtain more information through repeat transactions with borrowers. By comparison, repeat borrowing has little influence in bond markets, where publicly-available information dominates. But spreads on bonds are lower when they are issued in conjunction with IMF-supported programs, as if the existence of a program conveyed positive information to bondholders. The influence of IMF monitoring in bond markets is especially pronounced for countries vulnerable to liquidity crises.

Notes:

Description based on publisher supplied metadata and other sources.