Bailouts or Bail-INS: Responding to Financial Crises in Emerging Markets by Nouriel Roubini, Brad Setser, Noriel Roubini

Director of the Earth Institute, Columbia University - Jeffrey D. Sachs

by far the best book written in recent years on the vexing subject of how the international community should address international financial crises of emerging market economies. . . . This book will be read with enormous benefit by students, scholars, policymakers, and financial market participants.

Former Treasury Secretary - Lawrence Summers

Roubini and Setser bring valuable experience from the policymaking process to their analysis of responding to 21st century financial crises in emerging economies. Bailouts or Bail-ins? will prove to be a useful tool for those confronting these crises, and a clear, accessible overview for those studying global markets...

Foreign Affairs

It has become routine to describe International Monetary Fund aid to a country in financial distress as a "bailout," particularly of foreign creditors. This characterization was deeply misleading in most cases. But "bailing in" foreign creditors in times of crisis—having creditors contribute to financial relief rather than add to the financial problem—became one of the top agenda items in reforming the international financial architecture. It was acknowledged that any such mechanism(s) would likely reduce the flow of private capital to developing countries, but that was viewed by some as an advantage and by others as a necessary price for mitigating the economic damage and distress associated with financial crises. This thorough book reviews critically and common-sensically the extensive if somewhat specialized discussion of the issue, as well as proposals to restore financial stability after financial crises by involving private capital directly in prospective workouts—by (very) loose analogy, to create an effective Chapter 11 of the U.S. bankruptcy code for sovereign debtors.

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