The current debate points to promoting stability by impeding capital inflows through the increase in the cost of capital to the point that it reflects the true risk of investments, which would be underestimated by investors because they believe that the official sector will bail them out.
The problem is that, again, this source of moral hazard is not a significant factor in Latin America. The simple fact is that rescue operations of past years stopped the countries’ downfall, led to fast recovery, and were quickly repaid. Nobody was bailed out from high risk.