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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/19347| Title: | Dollarization, bailouts, and the stability of the banking system |
| Keywords: | ddc:330 Währungssubstitution US-Dollar Geldpolitik Bank Kleines-offenes-Land Theorie |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | Central bank policy suffers from time-inconsistency when facing a banking crisis : A bailout is optimal ex post but ex ante it should be limited to control moral hazard. Dollarization provides a credible commitment not to help at the cost of not helping even when it would be ex ante optimal to do so. Dollarization is good when the costs of establishing a reputation for the central bank are high, monitoring effort by the banker is important in improving returns, and when the cost of liquidating projects is moderate. However, a very severe moral hazard problem could make dollarization Undesirable. The results obtained are applied to assess the desirability of dollarization in a range of countries and the potential role of the IMF as International LOLR. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/19347 |
| Other Identifiers: | http://hdl.handle.net/10419/19347 ppn:346910994 RePEc:zbw:hwwadp:26195 |
| Appears in Collections: | EconStor |
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