Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87936
Authors: 
Garber, Peter M.
Year of Publication: 
1997
Series/Report no.: 
Working Paper, Inter-American Development Bank, Office of the Chief Economist 339
Abstract: 
The basic worldwide financial safety net architecture provides for a system of similar institutions: a lender of last resort, deposit insurance, and prudential regulation. In countries whose banking systems suffer seriously from negative capital positions and overbanking, such as in some Latin American markets, the safety nets and the detailed mechanisms of their operation may not be functional in reducing excessive risk taking. They offer banks strong incentives to double their bets for survival. Thus, banks` negative capital positions have been eliminated with capital injection, liquidation, and mergers.
Document Type: 
Working Paper

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