Publication: Blanket Guarantees
Date
2009-06
ISSN
Published
2009-06
Author(s)
Feyen, Erik
Vittas, Dimitri
Abstract
The expansion of deposit insurance and
introduction of debt guarantees have played a crucial role
in containing the financial crisis while giving governments
time to develop suitable policy responses. But these
measures do not address the root causes of the crisis, and
they lead to competitive distortions, moral hazard, and
large fiscal contingent liabilities. Rolling them back is
likely to require an internationally coordinated effort and
an answer to the important question, 'exit to what?'
Citation
“Feyen, Erik; Vittas, Dimitri. 2009. Blanket Guarantees. Crisis Response Note; No. 4. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/db3f8763-8223-5dd3-8a07-9991339bb6a2 License: CC BY 3.0 IGO.”