Open Issues

Michael Chui and Prasanna Gai

in Private Sector Involvement and International Financial Crises

Published in print January 2005 | ISBN: 9780199267750
Published online July 2005 | e-ISBN: 9780191602504 | DOI:
Open Issues

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Explores the circumstances under which the imposition of statutory debt restructuring mechanisms and/or debt standstills can trigger a ‘rush for the exits’ by creditors. Given the possibility of such creditor pre-emption, it also examines how the IMF and the official sector can galvanize private sector involvement by providing ‘catalytic finance’. Concludes with an empirical assessment of the extent of debtor moral hazard—the main reason cited against the adoption of a statutory approach to crisis management.

Keywords: catalytic finance; creditor pre-emption; debtor moral hazard; IMF; private sector involvement; rush for exits; sovereign debt restructuring mechanism

Chapter.  11253 words.  Illustrated.

Subjects: Financial Markets

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