Previous tests of creditor moral hazard cannot distinguish between two types of investor behavior: expectations of implicit guarantees or better future economic fundamentals due to a prospective IMF program. The novelty of our approach lies in the inclusion of the forward foreign exchange rate...

Abstract Since the Great Depression and the stock market crash in 1929, the global economy has experienced immersive development. This paper will analyze the effects of the involvement of governments in rescuing failing banks through different methodological tools. The purpose of this research...