01767cas a2200241 a 4500 AALejournalIMF001220 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451851380 1018-5941 BD-DhAAL BD-DhAAL Feltenstein, Andrew. Bank Failures and Fiscal Austerity : Policy Presecriptions for a Developing Country / Andrew Feltenstein. Washington, D.C. : International Monetary Fund, 2000. 1 online resource (30 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This work employs a dynamic general equilibrium model to evaluate the causes and implications of bank insolvencies. The model is applied to stylized data from several South Asian countries. It derives conclusions about policy instruments designed to alleviate the impact of insolvencies. Firms are subject to intertemporal solvency conditions, and the public withdraws deposits when borrowers default. If banks optimize by restricting credit to risky borrowers, these failures can be partially avoided. Numerical simulations conclude that the combination of compensating monetary policy and restrictive fiscal policy offers the best way of responding to a bank crisis caused by exogenous shocks. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2000/090 Full text available on IMF http://elibrary.imf.org/view/journals/001/2000/090/001.2000.issue-090-en.xml IMF e-Library