And thirdly, an early, massive intervention by the IMF undermines the ability of the financial markets to function in the long run. Functioning markets need not only the chance to make profits but also the possibility to punish mistakes through incurring losses. Otherwise there is a danger of a moral hazard. And not only for the policy makers of the countries concerned.
The markets, too, will end up underestimating the risks because they are confident of a bail-out. This leads to global misallocation of capital and shifts costs on to the public sector. Basically, this reveals the central problem of any form of interventionist economic policy: the other players come to expect interventions and anticipate the later measures.