Schadler, S. (2014) “The IMF’s preferred creditor status: Questions after the Eurozone crisis”, VoxEU Organisation, 28 Απριλίου.
The IMF has had a preferred creditor status throughout the history of its lending. This implies that borrowing countries are expected to give priority to meeting their obligations to the IMF over other creditors. This column reviews the onset of this preferred status, its purpose, and the way it changed after the recent Eurozone crisis. By lending €30 billion to Greece in 2010, the IMF introduced the option to permanently waive the requirement that a borrowing country is on the path to stability. This option increases the chance of moral hazard and undermines the strong framework for the preferred creditor status.
Throughout the history of IMF lending, the institution has had preferred creditor status – that is, distressed countries borrowing from the IMF are expected to give priority to meeting their obligations to the IMF over those to other creditors. This status is a defining characteristic of the IMF’s role in financial crises – it provides a high degree of confidence that IMF resources are safe when other creditors face substantial uncertainty about full repayment.
Σχετικές αναρτήσεις:
- Blanchard, Ο., Jaumotte, F. & Loungani, P. (2013) “Unemployment, labour-market flexibility and IMF advice: Moving beyond mantras”, VoxEU, 18 Οκτωβρίου.
- Schadler, S. (2013) “The IMF and the legacy of the euro crisis”, VoxEU Organisation, 15 Οκτωβρίου.
- Panagiotarea, Ε. (2013) “IMF in the Eurozone: A Case of Too Close to Fail?”, CrisisObservatory, 23 Ιουνίου.