The Impacts of IMF Bailouts in International Debt Crises

Zhaohui Zhang () and Khondkar E. Karim
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Zhaohui Zhang: Long Island University
Khondkar E. Karim: Rochester Institute of Technology

Chapter 51 in Encyclopedia of Finance, 2022, pp 1177-1185 from Springer

Abstract: Abstract The roles played by the IMF in international debt crises have long been considered controversial among both academics and policy makers. This study reviews the role of IMF bailouts in international debt crises. The literature shows that there is a statistically significant positive wealth transfer from the IMF to the international bank creditors during major event announcements. Further, the evidence indicates the existence of market informational efficiency and different pricing behavior of different groups of international bank creditors. A pertinent future research topic would be to examine whether IMF introduces the moral hazard problem into the international financial markets.

Keywords: Bank returns; Currency crisis; Equity prices; Event studies; International debt crisis; IMF bailout; LDC loans; Market efficiency (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-91231-4_51

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DOI: 10.1007/978-3-030-91231-4_51

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