Official Sector Lending Strategies during the Euro Area Crisis

Giancarlo Corsetti, Aitor Erce and Timothy Uy

No 12228, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In response to the euro area crisis, European policymakers took a gradual, incremental approach to official lending, at first relying on the approach followed by the International Monetary Fund, then developing their own crisis resolution framework. We review this development, marked by a substantial divergence in the terms of official loans offered to the crisis countries by the IMF and the euro area official lenders. Based on a unique dataset, we use event analysis to assess the impact of changing maturity and spreads of official loans on bond yields, liquidity and market access. In light of the euro area experience, we discuss arguments for rebalancing Debt Sustainability Analysis and programme design in favour of cash-flow management. While the official assistance granted to crisis countries in the euro area may not be replicable elsewhere, key lessons from it could foster a reconsideration of the modalities by which official lending institutions handle crises.

Keywords: Crisis management; Debt sustainability; Loans maturity; Market access; Private sector involvement; Seniority; Yield curve (search for similar items in EconPapers)
JEL-codes: F33 F34 F45 H12 (search for similar items in EconPapers)
Date: 2017-08
New Economics Papers: this item is included in nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://cepr.org/publications/DP12228 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Official Sector Lending Strategies During the Euro Area Crisis (2017)
Working Paper: Official Sector Lending Strategies During the Euro Area Crisis (2017)
Working Paper: Official sector lending strategies during the Euro Area crisis (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:12228

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP12228

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().