The costs and benefits of moral suasion: Evidence from the rescue of long-term capital management

C. Furfine

No 103, BIS Working Papers from Bank for International Settlements

Abstract: This study examines the level of unsecured borrowing done by the firms that would ultimately rescue Long-Term Capital Management in the days leading up to the hedge fund's rescue. Although there is some evidence that these banks borrowed less at the height of the crisis, further examination reveals that this reduction in borrowing was demand-driven and did not result from rationing on the part of the market.

Pages: 25 pages
Date: 2001-08
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Citations: View citations in EconPapers (10)

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