The financial benefits of the IMF

Age F. P. Bakker and Martijn A. Schrijvers
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Age F. P. Bakker: Nederlandsche Bank and Vrije Universiteit, Amsterdam
Martijn A. Schrijvers: Nederlandsche Bank, Monetary and Economic Policy Department, Amsterdam (The Netherlands)

BNL Quarterly Review, 2000, vol. 53, issue 214, 245-265

Abstract: The IMF provides loans to countries in financial distress at a relatively low interest rate. In this article we calculate how much the seven largest debtors to the IMF have saved on interest payments during the Asian crisis and its aftermath. We explain how the IMF can charge these low interest rates and at what cost for creditor countries. The conditionality attached to the use of IMF resources in the form of policy measures reduces moral hazard behaviour, we argue that this is a better instrument than raising interest rates on IMF loans.

Keywords: IMF (search for similar items in EconPapers)
JEL-codes: F32 F33 F34 O16 (search for similar items in EconPapers)
Date: 2000
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