Enemy of None But a Common Friend of All? An International Perspectiveon the Lender-Of-Last-Resort Function

Author/Editor:

Curzio Giannini

Publication Date:

January 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper explores whether and how national lender-of-last-resort practices can be adapted internationally. Nationally, the effectiveness of such practices is based on a blend of resource availability, technical discretion as to the conditions attached, ex ante supervision, and powers of enforcement. Some features of the international environment, however, make it difficult to replicate this structure, which may explain why recent large-scale rescue packages have worked less than satisfactorily. Private contingent credit facilities and IMF lending into arrears in the context of internationally approved, temporary moratoria on foreign debt may nonetheless offer some scope for effective, although limited in aims and resources, international liquidity support, but this would require amending the IMF’s Articles of Agreement.

Series:

Working Paper No. 99/10

Subject:

English

Publication Date:

January 1, 1999

ISBN/ISSN:

9781451842678/1018-5941

Stock No:

WPIEA0101999

Format:

Paper

Pages:

58

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