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Title

Moral hazard in the export credit industry

Authors
Gaillard, Norbert
Published in Flores Zendejas, Juan ; Gaillard, Norbert ; Michalek, Rick. Moral hazard : a financial, legal, and economic perspective. Abingdon (UK): Routledge. 2022, p. 57-79
Collection Routledge international studies in money and banking
Abstract This chapter shows that the actions undertaken by export credit agencies (ECAs) and export-import banks (EIBs) have encouraged moral hazard and induced risk-taking behaviors. Section 1 investigates how and why the legal and regulatory frameworks of ECAs and EIBs have contributed to reinforcing moral hazard. In fact, moral hazard results from a combination of the fierce international competition and the information asymmetry between insurers/lenders, exporters, and importers. Section 2 explores the practices of the U.S. Exim Bank in the 1970s. In a context of massive lending to developing countries, this institution refrained from using a reliable country risk rating system and prioritized the foreign borrowers most capable of obtaining preferential treatment from their government. It is not surprising that the percentage of non-performing loans soared during 1975-1982 and undermined the credibility of the U.S. Exim Bank.
Keywords Aléa moralGestion des risquesCredit à l'exportationDroitBanques
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ISBN: 9780367688332
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DARBELLAY, Aline, GAILLARD, Norbert. Moral hazard in the export credit industry. In: Flores Zendejas, Juan ; Gaillard, Norbert ; Michalek, Rick (Ed.). Moral hazard : a financial, legal, and economic perspective. Abingdon (UK) : Routledge, 2022. p. 57-79. (Routledge international studies in money and banking) doi: 10.4324/9781003139249-4 https://archive-ouverte.unige.ch/unige:158793

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Deposited on : 2022-02-09

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