01858cas a2200253 a 4500 AALejournalIMF008534 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451875195 1018-5941 BD-DhAAL BD-DhAAL Mendez Morales, Armando. The Role of Supervisory tools in Addressing Bank Borrowers' Currency Mismatches / Armando Mendez Morales, Maria del Mar Cacha. Washington, D.C. : International Monetary Fund, 2003. 1 online resource (31 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 Bank borrowers' currency mismatches often result from unhedged foreign currency borrowing in economies where there is significant dollarization, exposing the financial sector to disguised credit risk. In the absence of standard tools or guidelines to counteract this risk, countries have resorted to outright regulatory limits in cases of moderate dollarization and to undesirable exchange controls in other cases. This paper proposes a "specific-to-group" provision rule based on the effective borrowing cost differential between domestic and foreign currency. Such a rule would help internalize the corresponding risks for banks and their borrowers in line with internationally accepted prudential and accounting standards. Mode of access: Internet Mar Cacha, Maria del. IMF Working Papers; Working Paper ; No. 2003/219 Full text available on IMF http://elibrary.imf.org/view/journals/001/2003/219/001.2003.issue-219-en.xml IMF e-Library