Financial Crises, Liquidity, and the International Monetary System / / Jean Tirole.

• Superior document: Title is part of eBook package: De Gruyter Princeton University Press eBook-Package Backlist 2000-2013
• VerfasserIn: Tirole, Jean,
• Place / Publishing House: Princeton, NJ : : Princeton University Press, , [2002]; ©2002
• Year of Publication: 2002
• Language: English
• Physical Description: 1 online resource (168 p.)

Once upon a time, economists saw capital account liberalization--the free and unrestricted flow of capital in and out of countries--as unambiguously good. Good for debtor states, good for the world economy. No longer. Spectacular banking and currency crises in recent decades have shattered the consensus. In this remarkably clear and pithy volume, one of Europe's leading economists examines these crises, the reforms being undertaken to prevent them, and how global financial institutions might be restructured to this end. Jean Tirole first analyzes the current views on the crises and on the reform of the international financial architecture. Reform proposals often treat the symptoms rather than the fundamentals, he argues, and sometimes fail to reconcile the objectives of setting effective financing conditions while ensuring that a country "owns" its reform program. A proper identification of market failures is essential to reformulating the mission of an institution such as the IMF, he emphasizes. Next he adapts the basic principles of corporate governance, liquidity provision, and risk management of corporations to the particulars of country borrowing. Building on a "dual- and common-agency perspective," he revisits commonly advocated policies and considers how multilateral organizations can help debtor countries reap enhanced benefits while liberalizing their capital accounts. Based on the Paolo Baffi Lecture the author delivered at the Bank of Italy, this refreshingly accessible book is teeming with rich insights that researchers, policymakers, and students at all levels will find indispensable.

Table of Contents

Frontmatter -- Contents -- Acknowledgments -- Introduction -- 1. Emerging Markets Crises and Policy Responses -- 2. The Economists' Views -- 3. Outline of the Argument and Main Message -- 4. Liquidity and Risk-Management in a Closed Economy -- 5. Identification of Market Failure: Are Debtor Countries Ordinary Borrowers? -- 6. Implications of the Dual- and Common-Agency Perspectives -- 7. Institutional Implications: What Role for the IMF? -- 8. Conclusion -- References -- Index