1998 Articles

The IMF's Imprudent Role As Lender of Last Resort

Calomiris, Charles W.

The responses by the IMF and the U.S. government to the Mexican crisis of 1994-1995 and the recent Asian crises are examples of dangerous short-sightedness. In the wake of those crises, the Clinton Administration is promoting a new doctrine of global financial bailouts, administered through IMF largesse and conditions. If the IMF and the U.S. Treasury are permitted to prevail, the efficiency of global capital markets will suffer, and the incidence and the severity of financial crises will grow.