01652cas a2200241 a 4500 AALejournalIMF010000 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451954333 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Optimal Fiscal Policy and Government Provision of Contingent Liabilities : The Example of Government Loan and Deposit Guarantees. Washington, D.C. : International Monetary Fund, 1989. 1 online resource (28 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 The optimal provision of loan guarantees or deposit insurance is examined in the context of an overlapping generations model. It is demonstrated that even in the face of a market imperfection that precludes diversification of the private sector's loan portfolio to eliminate risk, full government guarantee of private sector loans (or deposits) is suboptimal. The results of the paper suggest that although some degree of guarantee is appropriate, the design of such policies should be tempered to avoid an inefficient level of capital accumulation. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1989/084 Full text available on IMF http://elibrary.imf.org/view/journals/001/1989/084/001.1989.issue-084-en.xml IMF e-Library