A (New) Country Insurance Facility

Tito Cordella y Eduardo Levy Yeyati
Authors registered in the RePEc Author Service: Eduardo Levy Yeyati and Tito Cordella

Business School Working Papers from Universidad Torcuato Di Tella

Abstract: To cope with the self-fulfilling liquidity runs that triggered many recent financial crises, we propose the creation of a country insurance facility. The facility, which we envisage as complementary to the existing multilateral lending facilities, would provide eligible countries with automatic access to a credit line at a predetermined interest rate. Eligibility criteria should be easily verifiable, focus on debt sustainability, and take into account the currency and maturity composition of the debt. Other critical design issues considered here include the size of the facility, its duration and charges, and the exit costs for a country that loses eligibility.

Pages: 34 pages
Date: 2005
New Economics Papers: this item is included in nep-fmk, nep-ias and nep-sea
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Citations: View citations in EconPapers (14)

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Related works:
Journal Article: A (New) Country Insurance Facility (2006)
Working Paper: A (New) Country Insurance Facility (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:udt:wpbsdt:newcountryins

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