Financial Crises: And What To Do About Them [Paperback]

Barry Eichengreen (Author)

Book Description

ISBN-10: 0199257442 | ISBN-13: 978-0199257447 | Publication Date: November 7, 2002

In this book, a leading observer of the international financial system assesses official efforts to address the problem of financial crises in emerging markets. Professor Eichengreen describes the progress that has been made in limiting the frequency of crises and strengthening the international financial system. He also shows that initiatives in this area have unintentionally made life more difficult for the poorest countries. He therefore argues that efforts to limit the threat to the international financial system need to be linked to an increase in development assistance. Another place where official efforts have fallen short, the author argues is in creating new ways of resolving crises. He shows that official financing through the International Monetary Fund is part of the problem. The IMF's financial rescues allow investors to escape without losses, in turn encouraging them to lend without due regard to the risks. This only makes the international system more crises prone. That the IMF has repeatedly come under pressure to bail out crisis countries reflects the absence of other acceptable ways of resolving the financial difficulties of emerging markets. Not lending threatens to expose the international financial system to a disorderly and disruptive crisis. At the same time, radical new alternatives like an international bankruptcy court or international lender of last resort would create more problems than they solved-even if there was the political appetite for such ambitious schemes, which there is not. The author concludes that the best way to enhance the efficiency and stability of international financial markets is by pushing for changes to the provisions of loan agreements that will enhance the capacity of creditors and debtors to resolve financial problems on their own.

Editorial Reviews

Review

"This book makes a valuable addition to the understanding of the numerous attempts and proposals for reforming the international financial system."- Brigitte Glanville, International Economics Programme, Royal Institute of International Affairs, UK

"If you want a clear and balanced exposition of the whys and wherefores of the recurring financial crises of the emerging world, Barry Eichengreen is your man. Financial Crises doesn't conclude with a surefire remedy -- it explains why there are none. What the book does is to tell you why that is true and what we can do to help reduce the pain." -Paul A. Volcker

"For guidance on today's important and fascinating debate on the international financial architecture, look no further. Barry Eichengreen's Financial Crises has it all and then some. With his unique blend of rigorous economic analysis and historical insight, as well as a knack for focusing on relevant topics in real time, Eichengreen gives us a state-of-the-art discussion on crisis prevention and management, and then takes us a step beyond with a balanced and sensible set of suggestions and recommendations." --Arminio Fraga, Governor, Central Bank of Brazil

About the Author

Barry Eichengreen is the George C. Pardee and the Helen N. Pardee Professor of Economics and Professor of Political Science at the University of California, Berkeley, where he has taught since 1987. He is also Research Associate of the National Bureau of Economic Research (Cambridge, Massachusetts) and Research Fellow of the Centre for Economic Policy Research (London) In 1997-8 he was Senior Policy Advisor at the International Monetary Fund. Professor Eichengreen has published widely on the history and current operation of the international monetary and financial system.

Product Details

• Paperback: 208 pages
• Publisher: Oxford University Press, USA (November 7, 2002)
• Language: English
• ISBN-10: 0199257442
• ISBN-13: 978-0199257447
• Product Dimensions: 8.4 x 5.4 x 0.6 inches
• Shipping Weight: 9.9 ounces (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #1,586,466 in Books (See Top 100 in Books)

More About the Author

Barry Eichengreen is George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, NBER Research Associate, and CEPR Research Fellow. He writes a monthly column for Project Syndicate and periodic columns for Conjuntura Economica (in Brazil), Finanz und Wirtschaft (in Switzerland), and Eurointelligence (in Europe).

Customer Reviews

Most Helpful Customer Reviews

3 of 3 people found the following review helpful:

4.0 out of 5 stars A Good Read!, August 5, 2004

By 

Rolf Dobelli "getAbstract" (Switzerland) - See all my reviews
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This review is from: Financial Crises: And What To Do About Them (Paperback)

Barry Eichengreen, one of the world's foremost economists, presents an illuminating, footnote-rich, reflection on the nature of financial crises and the need for systemic reform. Heretofore, official responses to financial crises have often made the problem of systemic vulnerability even worse. International Monetary Fund (IMF) bailouts of developing countries in crisis increase moral hazard by taking the pain of the consequences away from lenders and investors. The IMF effectively allows such investors to reap upside gains from risky ventures while they place responsibility for losses on the IMF itself. Market discipline needs to be the first line of defense against policies and practices that lead countries into crisis. But many political, institutional and financial players resist needed reforms. We congratulate Eichengreen for doing an excellent job of exploring what is necessary and distinguishing it from what is possible.