A Quote by Steve Hanke
The IMF is set up to deal with liquidity crises.
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The IMF is a more complicated issue. I think there is a broad sentiment among both the left and the right that the IMF may be doing more harm than good. On the right, there's the view that it represents a form of corporate welfare that is counter to the IMF's own ideology of markets. But anybody who has watched government from the inside recognizes that governments need institutions, need ways to respond to crises. If the IMF weren't there, it would probably be reinvented. So the issue is fundamentally reform.
It seems evident that the IMF has learned nothing from its inequality-inducing policies during the 1980s debt crises in Latin America nor from its recession-deepening response to the East Asian crisis of the late 1990s. In both regions, the IMF has become synonymous with making bad situations worse.
Regulatory changes have forced banks to closely examine their liquidity planning and to internalize the costs of liquidity provision. The costs of committed liquidity facilities will be passed on to clearing members. These costs are perhaps highest in clearing Treasury securities, where liquidity needs can be especially large.
If you don't have ample liquidity, and it's not durable, in times of stress, as you're looking for liquidity, you're forced to sell assets at declining prices, which then eats into your capital position, so it becomes this very, very negative cycle. There's no question that liquidity is sacrosanct.
We interpret our agreement with the IMF - our participation in the IMF's system of cooperation - as a borrowing agreement. The IMF sees it as an economic policy agreement. This is not in our interest.
Among other objectives, liquidity guidelines must take into account the risks that inadequate liquidity planning by major financial firms pose for the broader financial system, and they must ensure that these firms do not become excessively reliant on liquidity support from the central bank.
Times of economic crises can change what the competitive landscape looks like, because when, for example, you have boom times, capital is easy to come by, growth is easy, sometimes what you focus on is, you know, how to accelerate in the boom. During economic crises, the question is, the companies that come out of, you know, that are sailing through that with the best liquidity, both assets on the balance sheet, making money, ability to grow their businesses, get a disproportionate competitive advantage.
The runs started in Thailand after the IMF intervened in such a dramatic way. Then the IMF came to Indonesia.
When I hear complaints about less liquidity, remember there is such a thing as too much liquidity.
In the seed and the soil, we find the answers to every one of the crises we face. The crises of violence and war. The crises of hunger and disease. The crisis of the destruction of democracy.
The future is going to require really smart people. What we think are crises today probably will be no big deal, and we have no idea what will really be crises in the future.
The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the U.S. dollar should be kept at a reasonable and stable level.
The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable and stable level.
We have fulfilled all our agreements and all the conditions set by the IMF better than any other state.
Over the years, I've been involved in many business crises. I qualify this, since my crises have never involved life and death or the survival of the human race. But they are still crises.
The 1992 crisis proved that the existing system was unstable. Not moving forward to the euro would have set up Europe for even more disruptive crises.
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