Fixing Financial Crises in the 21st Century

By Andrew G. Haldane | Go to book overview

5

Private sector involvement in financial crisis resolution

Definition, measurement and implementation
William R. Cline1
5.1

Introduction
Emerging markets have experienced a long succession of crises in the past seven years, posing major challenges for international policy. Eight major financial crises (Mexico 1995; Thailand, Indonesia and South Korea 1997; Russia 1998; Brazil 1999; Argentina and Turkey 2001) and four notable minor ones (Ecuador, Pakistan and Ukraine 1999-2000; Uruguay 2002) have affected economies accounting for about 52 per cent of total external debt of emerging market economies. 2 Credit markets have gone from boom to bust in terms of aggregate net lending, although direct investment has held up relatively well and, for a number of sovereigns, market access has remained intact, while for other important borrowers it has been restored.One of the most controversial issues in international policy on crisis resolution has been how to achieve "private sector involvement" (PSI). This chapter seeks to synthesise what has been learned about PSI, and review the main issues that remain in dispute. It proposes relevant definitions for different types of PSI, compiles some broad-brush measurements of how much has occurred, and evaluates which types are beneficial, which are deleterious, and when. First, however, it is useful to review the conceptual framework for financial crisis resolution in emerging markets.
5.2

Framework
Whether consciously or not, in practice international policymakers have adhered to an analytical framework that runs along the following lines.
• Temporary official support, often on a large scale, can be appropriate to promote stability and a return of private market confidence, when the country is experiencing a liquidity crisis but is undertaking proper policy adjustments.
• It is important to maintain a functioning international capital market for developing countries, because private capital by far exceeds the potential of official development assistance in the task of global development.

-61-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Fixing Financial Crises in the 21st Century
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 348

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.