Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/mcb/jmoncb/v38y2006i7p1689-1714.html
   My bibliography  Save this article

How Do Official Bailouts Affect the Risk of Investing in Emerging Markets?

Author

Listed:
  • Dell'Ariccia, Giovanni
  • Schnabel, Isabel
  • Zettelmeyer, Jeromin
Abstract
We analyze the effects of bailout expectations on sovereign bond spreads in emerging markets. The non-bailout of Russia in August 1998 is interpreted as an event that decreased the perceived probability of future crisis lending to emerging markets. If official rescues are expected to mitigate the losses of investors in the event of a crisis, such an event should raise the cross-country dispersion of spreads, because investors pay more attention to differences in risk characteristics across countries. We find strong evidence for such an effect. This is consistent with the existence of "investor moral hazard," at least prior to 1998.

Suggested Citation

  • Dell'Ariccia, Giovanni & Schnabel, Isabel & Zettelmeyer, Jeromin, 2006. "How Do Official Bailouts Affect the Risk of Investing in Emerging Markets?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(7), pages 1689-1714, October.
    • Handle: RePEc:mcb:jmoncb:v:38:y:2006:i:7:p:1689-1714
    DOI: 10.1353/mcb.2006.0091
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1353/mcb.2006.0091
    File Function: full text
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1353/mcb.2006.0091?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:38:y:2006:i:7:p:1689-1714. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.