Risks to lenders and borrowers in international capital markets
1999
Hermalin, Benjamin E (Benjamin Edward) | Rose, Andrew
This paper provides a framework for understanding the risks to borrowers and lenders in capital markets. We begin with a description of a capital markets in a domestic context. This allows us to focus on two key imperfections which lie at the heart of all financial systems: imperfect information, and the difficulty of making credible commitments for repayment. In the international context, these problems tend to be exacerbated. There are also two sources of risk in international borrowing that are absent in a purely domestic context: the risk that sovereign borrowers will default, and the risk of macroeconomic instability that stems from the impact of net capital flows on the monetary system.
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Издатель National Bureau of Economic Research | Cambridge, MA : National Bureau of Economic Research, ©1999
Эту запись предоставил National Agricultural Library