You are the chair of an IMF task force. Your job is to reevaluate the policy of bailing out national governments that suffer major losses in the private sector in the name of protecting the value of the currency. Taxpayers in industrial countries typically foot the bill for IMF activities, with loans typically running into the many billions of dollars. Some critics call this system a kind of “remnant socialism” that rescues financial institutions and investors from their own mistakes with taxpayer money. Financial crises often originate as private-sector affairs, but then central banks step in and pledge foreign exchange reserves to shore up the currency. 1. Do you agree with the belief that the current system privatizes profits and then socializes losses if the government or the IMF step in with a bailout? 2. What sort of alternative can you envision to replace the current system, which often involves an IMF bailout?
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Case-Study.do….docx
