Publication

This paper discusses the future structure of the global financial system. The authors state that the international community will not be able to make real headway in crisis prevention if private creditors and large commercial banks can escape from bad loans to emerging economies at relatively low cost. The authors state that the International Monetary Fund (IMF) should therefore return to smaller rescue packages for country crises that do not threaten the performance of the global financial system, while in extreme cases the IMF should also require that debtors be engaged in serious and fair discussions on debt rescheduling with their private creditors.