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Financial crises and the multilateral response: What the historical record shows

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  • Barkbu, Bergljot
  • Eichengreen, Barry
  • Mody, Ashoka

Abstract

We provide a synoptic description of financial crises and the multilateral response over the course of the last four decades. We present both indicators of economic performance around crisis dates and a comprehensive description of multilateral rescue efforts. While emergency lending has grown, reliance on debt restructuring, broadly speaking, has declined. This leads us to ask what can be done to rebalance the management of debt problems toward a better mix of emergency lending and private sector burden sharing. In particular, we explore the idea of sovereign cocos, contingent debt securities that automatically reduce payment obligations in the event of debt-sustainability problems.

Suggested Citation

  • Barkbu, Bergljot & Eichengreen, Barry & Mody, Ashoka, 2012. "Financial crises and the multilateral response: What the historical record shows," Journal of International Economics, Elsevier, vol. 88(2), pages 422-435.
    • Handle: RePEc:eee:inecon:v:88:y:2012:i:2:p:422-435
    DOI: 10.1016/j.jinteco.2012.02.006
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    1. Suresh Sundaresan & Zhenyu Wang, 2010. "Design of contingent capital with a stock price trigger for mandatory conversion," Staff Reports 448, Federal Reserve Bank of New York.
    2. Oya Celasun & Xavier Debrun & Jonathan D. Ostry, 2006. "Primary Surplus Behavior and Risks to Fiscal Sustainability in Emerging Market Countries: A "Fan-Chart" Approach," IMF Staff Papers, Palgrave Macmillan, vol. 53(3), pages 1-3.
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    6. Barry Eichengreen & Ashoka Mody, 2004. "Do Collective Action Clauses Raise Borrowing Costs?," Economic Journal, Royal Economic Society, vol. 114(495), pages 247-264, April.
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    More about this item

    Keywords

    Financial crises; IMF programs; Multilateral response;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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