This paper assesses various crisis resolution proposals using a theoretical model of (liquidity and solvency) crisis. The model suggests that payments standstills and last-resort lending are equally efficient means of dealing with liquidity crises, while coordinated lending through creditor...

Existing empirical evidence on the effects of IMF intervention on debtor and creditor incentives - so-called moral hazard - is mixed. We develop a new test of creditor moral hazard which uses some new data and some more stringent identifying restrictions. The test examines the response of the...

Over the past few years there has been an active debate among policy-makers on appropriate mechanisms for restructuring sovereign debt, particularly international bonds. This paper develops a simple theoretical model to analyse the merits of these proposals. The analysis suggests that collective...