Bailout announcements agitated markets, shows IMF study
Ad-hoc bank bailouts had by far the largest impact on interbank markets, argues a new working paper published by the International Monetary Fund (IMF). How to Stop a Herd of Running Bears? constructs a comprehensive database of monetary, fiscal and financial sector policy decisions to assess the effectiveness of policy responses in the US, UK, euro area and Japan to the financial crisis.
The authors study changes in the spread between London Interbank Offered Rates (Libor) and Overnight Index
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