IDEAS home Printed from https://ideas.repec.org/a/taf/intecj/v30y2016i3p409-428.html
   My bibliography  Save this article

Applying the Lessons of Asia: The IMF's Crisis Management Strategy following the Global Financial Crisis

Author

Listed:
  • Shinji Takagi

Abstract

The paper reviews the International Monetary Fund's (IMF's) non-concessional lending programs following the global financial crisis, with a view to understanding how the IMF applied the lessons of the Asian crisis in designing its approach to crisis management. For this purpose, the paper focuses on the 2008 programs in Hungary, Iceland, Latvia and Ukraine – the first of its kind since the early 2000s – and compares them with the 1997 programs in Indonesia, Korea and Thailand. Our analysis finds the European programs better funded and their structural conditionality more focused. Other than these, the overall thrust of the programs was similar: fiscal and monetary tightening, coupled with banking reforms. The real difference was not so much about content but about philosophy. Relative to the Asian programs, the European programs were characterized by more emphasis on ownership, greater collaboration among stakeholders, more realistic assumptions and greater transparency about the risks and the logic of policy actions, and more built-in flexibility of targets and policy options. This approach to crisis management incorporated the changes that had been made since the Asian crisis in the IMF's policies and procedures to manage capital account crises more effectively.

Suggested Citation

  • Shinji Takagi, 2016. "Applying the Lessons of Asia: The IMF's Crisis Management Strategy following the Global Financial Crisis," International Economic Journal, Taylor & Francis Journals, vol. 30(3), pages 409-428, July.
  • Handle: RePEc:taf:intecj:v:30:y:2016:i:3:p:409-428
    DOI: 10.1080/10168737.2015.1136669
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10168737.2015.1136669
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/10168737.2015.1136669?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jean Pisani-Ferry & André Sapir & Guntram B. Wolff, . "EU-IMF assistance to euro area countries- an early assessment," Blueprints, Bruegel, number 779.
    2. Mr. Brad Setser & Mr. Ioannis Halikias & Mr. Alexander Pitt & Mr. Christoph B. Rosenberg & Mr. Brett E. House & Mr. Jens Nystedt & Mr. Christian Keller, 2005. "Debt-Related Vulnerabilities and Financial Crises," IMF Occasional Papers 2005/008, International Monetary Fund.
    3. Anders Aslund, 2010. "The Last Shall Be the First: The East European Financial Crisis," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 5218, April.
    4. Mr. Diego Saravia & Mr. Ashoka Mody, 2003. "Catalyzing Capital Flows: Do IMF-Supported Programs Work As Commitment Devices?," IMF Working Papers 2003/100, International Monetary Fund.
    5. Anders Aslund & Valdis Dombrovskis, 2011. "How Latvia Came through the Financial Crisis," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6024, April.
    6. Curzio Giannini & Mr. Carlo Cottarelli, 2002. "Bedfellows, Hostages, or Perfect Strangers? Global Capital Markets and the Catalytic Effect of IMF Crisis Lending," IMF Working Papers 2002/193, International Monetary Fund.
    7. Mr. Brad Setser & Nouriel Roubini & Mr. Christian Keller & Mr. Mark Allen & Mr. Christoph B. Rosenberg, 2002. "A Balance Sheet Approach to Financial Crisis," IMF Working Papers 2002/210, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. De Resende, Carlos & Takagi, Shinji, 2018. "Assessing the Effectiveness of IMF Programs Following the Global Financial Crisis: How Did It Change Since the Asian Crisis?," ADBI Working Papers 838, Asian Development Bank Institute.
    2. Shinji Takagi, 2010. "Applying the Lessons of Asia: The IMF’s Crisis Management Strategy in 2008," Working Papers id:3006, eSocialSciences.
    3. Shinji Takagi, 2010. "Applying the Lessons of Asia : The IMF’s Crisis Management Strategy in 2008," Macroeconomics Working Papers 22822, East Asian Bureau of Economic Research.
    4. Juan Manuel Lima & Mr. Johannes Wiegand & Enrique Montes & Carlos Varela, 2006. "Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities in Colombia, 1996-2003," IMF Working Papers 2006/005, International Monetary Fund.
    5. Eichengreen, Barry & Kletzer, Kenneth & Mody, Ashoka, 2006. "The IMF in a world of private capital markets," Journal of Banking & Finance, Elsevier, vol. 30(5), pages 1335-1357, May.
    6. Kim, Young-Han, 2011. "International policy coordination mechanism with respect to the moral hazards of financial intermediaries," Economic Modelling, Elsevier, vol. 28(4), pages 1914-1922, July.
    7. Evrensel, Ayse Y., 2004. "Lending to developing countries revisited: changing nature of lenders and payment problems," Economic Systems, Elsevier, vol. 28(3), pages 235-256, September.
    8. Graham Bird & Dane Rowlands, 2007. "The Analysis of Catalysis: IMF Programs and Private Capital Flows," School of Economics Discussion Papers 0107, School of Economics, University of Surrey.
    9. Bicu, Andreea & Candelon, Bertrand, 2013. "On the importance of indirect banking vulnerabilities in the Eurozone," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5007-5024.
    10. Marcos Chamon & Atish Ghosh & Jun Il Kim, 2012. "Are All Emerging Market Crises Alike?," Chapters, in: Maurice Obstfeld & Dongchul Cho & Andrew Mason (ed.), Global Economic Crisis, chapter 10, Edward Elgar Publishing.
    11. Michael D. Bordo & Ashoka Mody & Nienke Oomes, 2004. "Keeping Capital Flowing: The Role of the IMF," International Finance, Wiley Blackwell, vol. 7(3), pages 421-450, December.
    12. Aitor Erce & Daniel Riera-Crichton, 2015. "Catalytic IMF? A gross flows approach," Working Papers 9, European Stability Mechanism.
    13. Mr. Anthony J. Pellechio & Mr. Johan Mathisen, 2006. "Using the Balance Sheet Approach in Surveillance: Framework, Data Sources, and Data Availability," IMF Working Papers 2006/100, International Monetary Fund.
    14. Ms. Uma Ramakrishnan & Mr. Juan Zalduendo, 2006. "The Role of IMF Support in Crisis Prevention," IMF Working Papers 2006/075, International Monetary Fund.
    15. Manasse, Paolo & Roubini, Nouriel, 2009. ""Rules of thumb" for sovereign debt crises," Journal of International Economics, Elsevier, vol. 78(2), pages 192-205, July.
    16. Morris, Stephen & Shin, Hyun Song, 2006. "Catalytic finance: When does it work?," Journal of International Economics, Elsevier, vol. 70(1), pages 161-177, September.
    17. Nikolaos Georgiopoulos & Carnell Lambert, 2020. "Macroprudential liquidity stress tests using BIS locational banking statistics," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Bridging measurement challenges and analytical needs of external statistics: evolution or revolution?, volume 52, Bank for International Settlements.
    18. Carlos De Resende, 2007. "IMF-Supported Adjustment Programs: Welfare Implications and the Catalytic Effect," Staff Working Papers 07-22, Bank of Canada.
    19. Boz, Emine, 2011. "Sovereign default, private sector creditors, and the IFIs," Journal of International Economics, Elsevier, vol. 83(1), pages 70-82, January.
    20. Corsetti, Giancarlo & Guimaraes, Bernardo & Roubini, Nouriel, 2006. "International lending of last resort and moral hazard: A model of IMF's catalytic finance," Journal of Monetary Economics, Elsevier, vol. 53(3), pages 441-471, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:intecj:v:30:y:2016:i:3:p:409-428. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RIEJ20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.