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IMF Bailouts and Moral Hazard Author info | Abstract | Publisher info | Download info | Related research | Statistics Jong-Wha Lee (Korea University)
Kwanho Shin (Korea University)
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This paper empirically investigates the extent of investor moral hazard associated with IMF bailouts by analyzing the responses of sovereign bond spreads to the changes in the perceived probability of IMF bailouts of countries undergoing financial crisis. We do not find strong evidence that the extent of investor moral hazard changed after the non-bailout of Russia in August 1998 that signaled a modification to IMF intervention policy. In contrast, we find evidence that investor moral hazard is intensified for those countries that have stronger political connections to the IMF and that are thereby more likely to be bailed out by the IMF. This pattern prevailed even after the Russian crisis.
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Paper provided by EconWPA in its series International Finance with number
0501005.
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Length: 36 pages
Date of creation: 28 Jan 2005Date of revision:
Handle: RePEc:wpa:wuwpif:0501005Note: Type of Document - pdf; pages: 36Contact details of provider: Web page: http://129.3.20.41
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Keywords: IMF ; moral hazard ; sovereign bond spreads ; international financial architecture ; Other versions of this item:
Find related papers by JEL classification: F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions F34 - International Economics - - International Finance - - - International Lending and Debt Problems
This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Andrew G Haldane & J"rg Scheibe, .
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Journal of Monetary Economics ,
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Economic Policy ,
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Oscar Bernal & Kim Oosterlinck & Ariane Szafarz, 2008.
"Observing bailout expectations during a total eclipse of the sun ,"
Working Papers CEB
08-015.RS, Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB).
[Downloadable!]
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BERNAL DIAZ, Oscar & OOSTERLINCK, Kim & SZAFARZ, Ariane, 2009.
"Observing bailout expectations during a total eclipse of the sun ,"
ULB Institutional Repository
09-01.RS, ULB -- Universite Libre de Bruxelles.
[Downloadable!] BERNAL DIAZ, Oscar & OOSTERLINCK, Kim & SZAFARZ, Ariane, 2008.
"Observing bailout expectations during a total eclipse of the sun ,"
ULB Institutional Repository
08-015.RS, ULB -- Universite Libre de Bruxelles.
[Downloadable!] Oscar Bernal & Kim Oosterlinck & Ariane Szafarz, 2009.
"Observing bailout expectations during a total eclipse of the sun ,"
Working Papers DULBEA
09-01.RS, Université libre de Bruxelles, Department of Applied Economics (DULBEA).
[Downloadable!] Heppke-Falk, Kirsten H. & Wolff, Guntram B., 2007.
"Moral hazard and bail-out in fiscal federations: evidence for the German Länder ,"
Discussion Paper Series 1: Economic Studies
2007,07, Deutsche Bundesbank, Research Centre.
[Downloadable!]
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