01830cas a2200265 a 4500 AALejournalIMF005387 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451870947 1018-5941 BD-DhAAL BD-DhAAL Zettelmeyer, Jeromin. A Theory of International Crisis Lending and IMF Conditionality / Jeromin Zettelmeyer, Jonathan Ostry, Olivier Jeanne. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (33 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 We present a framework that clarifies the financial role of the IMF, the rationale for conditionality, and the conditions under which IMF-induced moral hazard can arise. In the model, traditional conditionality commits country authorities to undertake crisis resolution efforts, facilitating the return of private capital, and ensuring repayment to the IMF. Nonetheless, moral hazard can arise if there are crisis externalities across countries (contagion) or if country authorities discount crisis costs too much relative to the national social optimum, or both. Moral hazard can be avoided by making IMF lending conditional on crisis prevention efforts-"ex ante" conditionality. Mode of access: Internet Jeanne, Olivier. Ostry, Jonathan. IMF Working Papers; Working Paper ; No. 2008/236 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/236/001.2008.issue-236-en.xml IMF e-Library