Munich Personal RePEc Archive

Riesgo moral asociado al uso de endeudamiento externo de corto plazo por parte del sector financiero

Leon, Jorge and Monge, Carlos (2010): Riesgo moral asociado al uso de endeudamiento externo de corto plazo por parte del sector financiero.

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Abstract

This paper addresses the issue of moral hazard associated with the use of short-term foreign borrowing by the financial intermediaries in Costa Rica. This situation arises from the implicit insurance that the authorities confer; given the expectation that banks have about central bank incentives to intervene to prevent the fail of any systemically important financial institution (SIFI). Using a simple mathematical-economic model, this paper analyzes several factors involved in this phenomenon and suggests policy measures that could provide a solution to the problem.

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