Risks to Lenders and Borrowers in International Capital Markets / Benjamin E. Hermalin, Andrew K. Rose.

Format:

Book

Author/Creator:

Hermalin, Benjamin E.

Contributor:

National Bureau of Economic Research.

Rose, Andrew K.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6886.

NBER working paper series no. w6886

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Summary:

This paper provides a framework for understanding the risks to borrowers and lenders in capital markets. We begin with a description of a capital markets in a domestic context. This allows us to focus on two key imperfections which lie at the heart of all financial systems: imperfect information, and the difficulty of making credible commitments for repayment. In the international context, these problems tend to be exacerbated. There are also two sources of risk in international borrowing that are absent in a purely domestic context: the risk that sovereign borrowers will default, and the risk of macroeconomic instability that stems from the impact of net capital flows on the monetary system.

Notes:

Print version record

January 1999.