Impact of IMF programs on asset values

Brealey, R A and Kaplanis, E C (2000) Impact of IMF programs on asset values. Working Paper. London Business School IFA Working Paper.

Abstract

Recent events in Asia, Russia and South America have prompted discussions about the role of the IMF and its effectiveness. There are two commonly cited roles for the IMF in resolving international ficial crises. The first is to provide an international analogue to the domestic lender of last resort. The second is to advise on, and encourage, policy reforms in affected countries. Critics of the IMF often argue that IMF support is associated with moral hazard and that it is questionable whether this support benefits the countries in crisis or the foreign investors and lenders. The aim of this paper is to examine the effect of IMF support programs on asset values in an attempt to assess the wealth effects of these programs.