Re-Accessing International Capital Markets After Financial Crises: Some Empirical Evidence

June 1, 2007

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Format: Chicago

Luisa Zanforlin. Re-Accessing International Capital Markets After Financial Crises: Some Empirical Evidence, (USA: International Monetary Fund, 2007) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper analyzes the factors that contribute to the re-access of countries that emerge from a severe financial crisis to the international capital markets. It conjectures that these factors depend on a sovereign's commitment and ability to repay its foreign debt, signaled by sound macroeconomic policies, and the global liquidity environment. Using panel data for 49 countries over a 24-year period, the analysis uses a simple probit approach to show that, indeed, a sustainable debt profile and a sound external position, accompanied by a favorable global liquidity environment, are key factors in affecting the likelihood a sovereign reaccesses international capital markets.

Subject: Debt service, Debt service ratios, Financial crises, International capital markets, International liquidity

Keywords: Capital market, Expected return, Financial crisis, Liquidity support, WP

Publication Details

Pages:

20
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/136
Stock No:

WPIEA2007136
ISBN:

9781451867008
ISSN:

1018-5941

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