A (New) Country Insurance Facility
AbstractTo cope with the self-fulfilling liquidity runs that triggered many recent financial crises, we propose the creation of a country insurance facility. The facility, which we envisage as complementary to the existing multilateral lending facilities, would provide eligible countries with automatic access to a credit line at a predetermined interest rate. Eligibility criteria should be easily verifiable, focus on debt sustainability, and take into account the currency and maturity composition of the debt. Other critical design issues considered here include the size of the facility, its duration and charges, and the exit costs for a country that loses eligibility.
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Bibliographic InfoPaper provided by Universidad Torcuato Di Tella in its series Business School Working Papers with number newcountryins.
Length: 34 pages
Date of creation: 2005
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- NEP-ALL-2005-04-03 (All new papers)
- NEP-FMK-2005-04-03 (Financial Markets)
- NEP-IAS-2005-04-03 (Insurance Economics)
- NEP-SEA-2005-04-03 (South East Asia)
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