The Financial Impact of the IDB’s Liquidity Program for Growth Sustainability
AbstractThis paper assesses the impact of the Liquidity Program for Growth Sustainability (LPGS) on Latin America and the Caribbean, instrumented by the IDB to confront the regional spillovers of the subprime crisis. This emergency liquidity line was set up to boost productive loans of commercial banks, channeled through a second-tier scheme. The empirical strategy revolves around GARCH models to test whether the public announcement of negotiations and of loan approval have had any impact on high frequency macroeconomic data, such as the country risk premium and the interbank interest rate. Our evidence reveals a positive and significant effect on financial stability attributable to LPGS in Jamaica, El Salvador, Costa Rica, Dominican Republic and Panama. We additionally discuss the rationale of key LPGS’ design features and the observed outcomes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata in its series Department of Economics, Working Papers with number 079.
Length: 46 pages
Date of creation: Sep 2010
Date of revision:
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eduardo Fernandez-Arias & Andrew Powell & Alessandro Rebucci, 2009.
"The Multilateral Response to the Global Crisis: Rationale, Modalities, and Feasibility,"
Research Department Publications, Inter-American Development Bank, Research Department
4629, Inter-American Development Bank, Research Department.
- Eduardo Fernández-Arias & Andrew Powell & Alessandro Rebucci, 2009. "The Multilateral Response to the Global Crisis: Rationale, Modalities, and Feasibility," IDB Publications 6770, Inter-American Development Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Diego Fernandez Felices).
If references are entirely missing, you can add them using this form.