Some lessons from Argentina Crisis:

• Exchange rate regimes : Hard pegs are extremely demanding. In particular they require price
flexibility and very prudent fiscal policies. Otherwise it is better to float.
• The banking system and sovereign risk, it is critical to isolate the private financial sector from
sovereign risk. Solvent banks may suffer contagion from an insolvent sovereign. In Argentina doubts
about sovereign solvency caused a bank run.
• Supervision should take into account the solvency of the sovereign.
• A dollarized banking system, banking regulation in dollarized economies should discourage
liability dollarization.
• Concerted forms of PSI (such as moral suasion and concerted debt swaps) that affect domestic banks
may seriously affect the solvency of the banking sector.
• IMF programs should not be procyclical, as they have been in Argentina's case.
• Financial and monetary issues are & have been crucial. However, the Fund has usually focused on
fiscal policy. This “fiscal bias” may be conditioning current prior actions required to Argentina,
which may be paying insufficient to monetary and financial issues.
• Financial liberalization, the liberalization of the financial account should be gradual and only after
the effective liberalization of trade.
• Fiscal sustainability and vulnerability, Traditional debt sustainability assessment is not enough.
Whilst according to traditional fiscal indicators there may be apparently no reason for concern, a
shock could rapidly turn the fiscal stance unsustainable.
• Debt restructuring in Argentina, Argentina has shown that the costs imposed on the banks by the
Sovereign may be very large. It affects the solvency of the domestic financial sector.
• The longer it takes to start the restructuring, the more value will tend to be destroyed. Litigation
risk will also increase.
• Debt negotiations cannot start until an economic program is in place. Lending into arrears will be
necessary.
• In any case, the haircut will be large, if it is going to make a significant contribution to recover debt
sustainability.
• It will be important to observe how long it takes for a country to regain access to capital markets
after a large default. Up to now markets have shown little memory.

Reference :
1) THE ARGENTINE CRISIS AND THE ROLE OF THE IMF by Gonzalo Ramos & Bernardo Hernández.