The
Meltzer Commission Report.
A study by a blue-ribbon panel of experts, presented to Congress on how to
reform the IMF and World Bank: mainly by limiting lending activities to
last-resort situations.
Michael
Pettis
The
Volatility Machine: Emerging Economies and the Threat of Financial
Collapse Oxford
UP, 2001.
Will
Globalization Go Bankrupt?
Foreign
Policy, Sept-Oct 2001
A
Columbia University finance professor and emerging-market veteran, Pettis
examines recent financial crises in emerging market countries along with
the history of international lending since the 1820s to argue that the
process of international lending is driven primarily by external events
and not by local politics and/or economic policies.
He contends that because crises are inevitable, countries should
focus their efforts on liability management policies that can reduce the
impact on their economies when global markets turn against them.
The
Bank of Canada and Bank of England
The
Resolution of International Financial Crises: Private Finance and Public
Funds.
Fall 2001
Andy
Haldane of the Bank of England and Mark Kruger of the Bank of Canada call
for “constraints, clarity, and orderliness” as the keys to reducing
the frequency and cost of crises. Constraints
on IMF lending would ensure that private lenders get involved in resolving
crises; it would help encourage debtors and creditors to seek co-operative
solutions to crisis. Official
sector lenders should be ready to support standstills if they are
implemented in an orderly fashion. In the exceptional circumstances when
it may be necessary to breach normal lending limits, such financing would
be subject to stringent safeguards. A framework with these characteristics
– constraints, clarity and orderliness - has the potential to reduce the
incidence and cost of crises.
Anne Krueger and the IMF Proposals
IMF First Deputy Managing Director Anne Krueger
caused an uproar in November 2001 when she proposed an international
Chapter 11 for “bankrupt” nations.
Her original proposal raised the prospect of an international
bankruptcy “tribunal.”
A
New Approach to Sovereign Debt Restructuring
Krueger
statement March 6 2002
Krueger
New Approach Update April 2002
Transcript
of Krueger Briefing April 2002
IMF Background Publications on
Sovereign Debt Restructuring
Sovereign
Debt Restructuring Reflections Feb 2002 (IMF)
New
Approach Reflections Feb 2002 (IMF)
IMF Restructuring Survey March 2002
The
International Financial Architecture What's New What's Missing
Sovereign
Debt Restructurings and the Domestic Economy (IMF)
Globalization
A Framework for IMF Involvement -- An IMF Issues Brief
Private-Sector Views
Institute
for International Finance
This
association of private banks argues against a new formalized sovereign
bankruptcy framework, preferring a refinement of existing mechanisms.
IIF
March
2002 Recommendations
The IIF calls for a
three-pronged approach to international crises: 1.
Establishing a consultative mechanism (the Private Sector Advisory Group)
to sustain investor confidence and lay the basis for orderly
restructurings. 2.
Developing market incentives, broad-based use of collective action
clauses, and other contractual features to minimize the free rider
problem. 3.
Designing a targeted legal strategy to address vulture funds.
IIF June
2002 Recommendations
The IIF and five other market associations issue their blueprint
for “a holistic
framework that avoids debt restructuring where still possible, facilitates
it where necessary, and restores early market access. The use of
collective action clauses in individual sovereign debt contracts would
introduce a useful element of suppleness into the system.”
What
Went Wrong in Argentina? The Experts Debate
Nancy Birdsall
What
Went Wrong in Argentina? A January 29, 2002 presentation to a Center
for Strategic and International Studies conference. Nancy Birdsall,
a former Inter-American Development Bank official who is now President of
the Center for Global Development, cites the economic straitjacket of
dollar-peso parity, the mediocre fiscal management of the 1990s, bad
politics, bad "parenting" (from the multilaterals) and bad
luck.
Steve H. Hanke
The
Professor of Applied Economics, The Johns Hopkins University; President,
Toronto Trust Argentina; and Senior
Fellow, Cato Institute, has argued for dollarization as part of the way
out of Argentina’s conundrum.
Argentina's
Current Political-Economic Crisis
March
5, 2002
Testimony by before the Subcommittee on International Monetary Policy and
Trade Committee on Financial Services of the United States House of
Representatives.
Latin
Business Chronicle: “Argentina: The U.S. Role”
March 11, 2002
Hanke chastises the U.S. Treasury for not having supported dollarization,
and lambastes Argentina for its freezing of the banking system.
Currency
boards and dollarization A
website with resources on dollarization, compiled and updated
regularly by Kurt Schuler, Senior economist,
Office of the Chairman, Joint Economic Committee of the U.S. Congress.
Schuler has collaborated with Steve Hanke.
Rudiger Dornbusch
PLAN
FOR ARGENTINA March 2002
The late MIT
economist Rudi Dornbusch argues that Argentina is bankrupt
economically, politically and socially. “Its institutions are
dysfunctional, its government disreputable, its social cohesion collapsed.
Having fallen that deep, it comes as no surprise that reconstruction
rather than quick-fix financial support has to be the answer.” His
blueprint is a rough outline at best, but its principles are instructive.
Michael Mussa
Where
the IMF and Argentina Failed July 2002
Michael Mussa, former chief economist of the International Monetary Fund,
gives a blow-by-blow inside account of the IMF’s role in the policy
failures that led to Argentina’s default. Now at the Institute for
International Finance, he delivered a paper in Spring 2002 that the IIF
will soon issue as a book. Mussa
emphasizes that the persistent inability of the Argentine authorities at
all levels to run a responsible fiscal policy—even when the Argentine
economy was performing very well—was the primary avoidable cause of the
country’s catastrophic financial collapse. His analysis of why the IMF
failed to press aggressively for a more responsible fiscal policy
illuminates the institution’s elusive approach to its own
responsibility: unable to decide whether it is a taskmaster or a
benevolent uncle. Mussa contends that the IMF erred in the summer of 2001
by extending further massive support for unsustainable policies, rather
than insisting on a new policy strategy that might have mitigated some of
the damage from a crisis that had become unavoidable.
While it is
certainly the case that the August 2001 package was ill-conceived, this
paper misses the point that by then any
changes at all would have been a day late and a dollar short.
Even more important lost opportunities included December 2000 (when
the international community pulled together nearly $40 billion in aid),
December 1999 (when President Fernando de la Rua took office with a
mandate to change the irresponsibility and corruption of the Menem era,
and the IMF approved $7.6 billion conditioned on a policy package that
included its own recessionary prescriptions), and most importantly the
boom years of the mid 1990s –when the IMF tacitly supported vast
increases in government spending and debt.
Will
Brazil Be
the Next Domino to Fall?
John
Williamson
Is
Brazil Next?
August 2002
John Williamson, better known as the father of the "Washington
Consensus" on appropriate economic reforms for developing countries,
argues that default is by no means inevitable for Latin America's largest
nation --but that Brazil nevertheless is far from out of the woods.
Joseph Stiglitz
A
Second Chance for Brazil and the IMF August
14, 2002
In a New York Times article, the Nobel economics laureate Joseph
Stiglitz defends the international rescue package for
Brazil.
Last
updated September 30, 2002
