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The financial benefits of the IMF

Author

Listed:
  • Age F. P. Bakker

    (Nederlandsche Bank and Vrije Universiteit, Amsterdam)

  • Martijn A. Schrijvers

    (Nederlandsche Bank, Monetary and Economic Policy Department, Amsterdam (The Netherlands))

Abstract

The IMF provides loans to countries in financial distress at a relatively low interest rate. In this article we calculate how much the seven largest debtors to the IMF have saved on interest payments during the Asian crisis and its aftermath. We explain how the IMF can charge these low interest rates and at what cost for creditor countries. The conditionality attached to the use of IMF resources in the form of policy measures reduces moral hazard behaviour, we argue that this is a better instrument than raising interest rates on IMF loans.

Suggested Citation

  • Age F. P. Bakker & Martijn A. Schrijvers, 2000. "The financial benefits of the IMF," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(214), pages 245-265.
    • Handle: RePEc:psl:bnlaqr:2000:32
    as

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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9919/9801
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    References listed on IDEAS

    as
    1. Barry Eichengreen & Ashoka Mody, 1998. "What Explains Changing Spreads on Emerging-Market Debt: Fundamentals or Market Sentiment?," NBER Working Papers 6408, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    ;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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