Annotation During the 1990s, the concept of catalytic official finance (COF) gained prominence in policy debates. the concept revolves around the idea that the propensity of investors to lend to a country increases when the IMF provides its seal of approval-backed up by only limited official financing-on the country's economic program. COF aims at avoiding, on the one hand, the massive use of public money to bail out private investors; on the other, the recourse to coercive bailing-in mechanisms. the paper concludes that COF, while possibly useful in other contexts, is less reliable when used to manage capital account crises.