Economic Issues

Moral Hazard: Does IMF Financing Encourage Imprudence by Borrowers and Lenders?

Author/Editor:

Steven T Phillips ; Timothy D. Lane

Publication Date:

May 3, 2002

Electronic Access:

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Summary:

Examines the issue of moral hazard inrelation to IMF loans to countries in financial difficulties. Concerns about moral hazard have had a prominent place in recent discussions on how the architecture of the international financial system should be reformed and what the IMF’s role should be.

Series:

Economic Issues No. 2002/003

Subject:

Emerging and frontier financial markets Financial crises Financial institutions Financial markets Financial sector policy and analysis Financial services Moral hazard Systemically important financial institutions Yield curve