The enhancement of the global financial safety net is at the forefront of policy discussions about the international monetary system. Since the global financial crisis the IMF has extended its toolkit with new precautionary lending instruments, most importantly the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL), in support of the IMF's role as international lender of last resort. The main contribution of this research project is to bring more empirical rigour to the ongoing debates about these precautionary instruments, and that on two fronts. First, the key macroeconomic, financial and political variables that explain whether or not countries enter into such precautionary arrangements will be identified. Second, the effect of the arrangements on bond spreads and other outcome variables in the participating countries will be evaluated using a novel counterfactual approach, the so-called 'synthetic control method'.