Dealing with systemic sovereign debt crises : fiscal consolidation, bail-ins or official transfers? /

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Bibliographic Details
Author / Creator:	Sandri, Damiano, (IMF staff), author.
Imprint:	[Washington, D.C.] : International Monetary Fund, ©2015.
Description:	1 online resource (43 pages) : color illustrations.
Language:	English
Series:	IMF working paper ; WP/15/223 IMF working paper ; WP/15/223.
Subject:	Debts, Public -- Econometric models. Fiscal policy -- Econometric models. Debt relief -- Econometric models. Debt relief -- Econometric models. Debts, Public -- Econometric models. Fiscal policy -- Econometric models.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12504779

Hidden Bibliographic Details
Other authors / contributors:	International Monetary Fund. Research Department.
ISBN:	1513569244 9781513569246
ISSN:	1018-5941
Notes:	"October 2015." "Research Department." Includes bibliographical references (pages 41-42). Online resource; title from pdf title page (IMF.org Web site, viewed October 20, 2015).
Summary:	The paper presents a tractable model to understand how international financial institutions (IFIs) should deal with the sovereign debt crisis of a systemic country, in which case private creditors' bail-ins entail international spillovers. Besides lending to the country up to its borrowing capacity, IFIs face the difficult issue of how to address the remaining financing needs with a combination of fiscal consolidation, bail-ins and possibly official transfers. To maximize social welfare, IFIs should differentiate the policy mix depending on the strength of spillovers. In particular, stronger spillovers call for smaller bail-ins and greater fiscal consolidation. Furthermore, to avoid requiring excessive fiscal consolidation, IFIs should provide highly systemic countries with official transfers. To limit the moral hazard consequences of transfers, it is important that IFIs operate under a predetermined crisis-resolution framework that ensures commitment. --Abstract.
Standard no.:	10.5089/9781513569246.001

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