2008-10-13cfr.org

Banks are different than countries, so the analogy is imprecise — but back when emerging economies had trouble rolling over their short-term dollar debts during the crises of 97-98, the G-7 never pledged to lend “any amount” needed.

Lending to countries through institutions like the IMF isn’t collateralized — but it also was never unconditional. The G-7’s guarantee of liquidity doesn’t seem to be linked to steps the banks could take to help themselves — like suspending dividend payments on their common stock.

Indeed; quite the double-standard!



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