This paper assesses empirically the effectiveness of the IMF as a component of the Global Financial Safety Net by running a panel regression on a sample of emerging market countries' sovereign spreads. In particular, we check if the size of the Fund's lending capacity and the introduction of the...

Sovereign CDS spreads exhibit strong co-movements across countries. We use dynamic latent factor modelling to filter the global, regional and country effects on the spreads of 37 sovereigns. On average, approximately two-thirds of monthly CDS variability is accounted for by international...