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Banking on Seniority: The IMF and the Sovereign's Creditors
Author(s) -
Erce Aitor
Publication year - 2015
Publication title -
governance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.46
H-Index - 76
eISSN - 1468-0491
pISSN - 0952-1895
DOI - 10.1111/gove.12105
Subject(s) - creditor , seniority , balance of payments , business , financial system , international economics , order (exchange) , collateral , payment , economics , monetary economics , finance , debt , political science , law
The programs designed by the I nternational M onetary F und ( IMF ) during the G lobal F inancial C risis have shown more awareness of the importance of domestic demand for the prospects of economic recovery. Yet the IMF has continued to do little about the late payments made by governments to domestic creditors and suppliers. In contrast, the greater protection historically awarded by the IMF to foreign creditors has endured throughout the recent crisis. The article suggests that, in order to adequately balance foreign creditor seniority and growth objectives, the IMF may sometimes need to emphasize equitable burden‐sharing across categories of creditors rather than privilege the interests of international bond markets.