Global Financial Safety Nets: Where Do We Go from Here?
Eduardo Fernandez-Arias and
Authors registered in the RePEc Author Service: Eduardo Levy Yeyati ()
International Finance, 2012, vol. 15, issue 1, 37-68
From an emerging markets perspective, the global safety net remains full of holes despite recent stitches during the crisis. This paper proposes an effective and workable international lender-of-last-resort (ILLR) for systemic liquidity crises based on (i) an automatic trigger to access the facility; (ii) unilateral country pre-qualification to the facility during IMF Article IV consultations; and (iii) liquidity funded by the world's ‘issuers of last resort’. These principles support a reliable and broad-based ILLR without the carrying costs associated with inefficient reserve hoarding; one that would actually work as an effective preventive facility with minimal room for moral hazard.
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Working Paper: Global Financial Safety Nets: Where Do We Go from Here? (2011)
Working Paper: Global Financial Safety Nets: Where Do We Go from Here? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:intfin:v:15:y:2012:i:1:p:37-68
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