Bail Out or Work Out ? Theoretical Considerations  

Oleh:

Haldane, Andrew G. ; Irwin, Gregor ; Saporta, Victoria

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 114 no. 494 (Mar. 2004), page C130-C148.
Topik: liquidity; bail; work out; considerations
Fulltext: C130.pdf (154.25KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.13 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

This paper assesses various crisis resolution proposals using a theoretical model of liquidity and solvency crisis. The model suggests that payments stand stills and last-resort lending are an equally efficient means of dealing with liquidity crises, while coordinated lending through creditor committees is second-best. Debt write - downs are preferred to subsidised IMF financing when dealing with solvency crises, because of the negative moral hazard implications of the latter tool. Finally, the model suggests that international bankruptcy court proposals may be superior to existing contractual approaches in securing such write - downs.

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