Instead of adding to their debts, Mexico would have been forced to renegotiate an extension of its debt’s maturity with its creditors and sell its assets to pay them off. Such measures would have restored market confidence in Mexico. Instead, the Mexican government was let off the hook, and Mexico’s debt holders collected their money back. On the other hand, I believe that IMF assistance gives countries a choice. In the absence of IMF funding, the country would have no choice but to adjust, making the solution more difficult. In conclusion, I believe some degree of moral hazard is …show more content…
Like any other loan agreement, the lender would have some form of collateral from the borrower just in case the borrower fails to repay the loan without any other complicated policies. The IMF uses the loan in order to benefit themselves and to make changes to fiscal and monetary policies in the receiving countries. Their prime aim is not to assist countries but rather to make a profit of some benefit out of a bad situation. The IMF need to start putting their words into action by actually helping countries fix their financial debt instead of adding to it. First think of the crisis the country is in and how best you can assist. If the countries best interest is considered then the blame cannot be put on the