Debt Seniority And Sovereign Debt Crises

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Debt Seniority and Sovereign Debt Crises

Mr.Anil Ari,Giancarlo Corsetti,Luca Dedola
Debt Seniority and Sovereign Debt Crises Book PDF

Author : Mr.Anil Ari,Giancarlo Corsetti,Luca Dedola
Publisher : International Monetary Fund
Page : 43 pages
File Size : 48,8 Mb
Release : 2018-05-09
Category : Business & Economics
ISBN : 9781484356210

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Debt Seniority and Sovereign Debt Crises by Mr.Anil Ari,Giancarlo Corsetti,Luca Dedola Pdf

Is the seniority structure of sovereign debt neutral for a government's decision between defaulting and raising surpluses? In this paper, we address this question using a model of debt crises where a discretionary government endogenously chooses distortionary taxation and whether to apply an optimal haircut to bondholders. We show that when the size of senior tranches is small, a version of the Modigliani-Miller theorem holds: tranching just redistributes government revenues from junior to senior bondholders, while taxes and government borrowing costs remain unchanged. However, as senior tranches become sufficiently large, default costs on senior debt transpire into a stronger commitment to repay not only the senior tranche, but also the junior one. We show that there is a lower threshold for senior bonds above which tranching can eliminate default on both junior and senior debt, and an upper threshold beyond which the government defaults also on senior debt.

Sovereign Debt Structure for Crisis Prevention

Mr.Eduardo Borensztein,Mr.Olivier Jeanne,Mr.Paolo Mauro,Mr.Jeronimo Zettelmeyer,Mr.Marcos Chamon
Sovereign Debt Structure for Crisis Prevention Book PDF

Author : Mr.Eduardo Borensztein,Mr.Olivier Jeanne,Mr.Paolo Mauro,Mr.Jeronimo Zettelmeyer,Mr.Marcos Chamon
Publisher : International Monetary Fund
Page : 72 pages
File Size : 46,8 Mb
Release : 2005-01-26
Category : Business & Economics
ISBN : 9781589063778

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Sovereign Debt Structure for Crisis Prevention by Mr.Eduardo Borensztein,Mr.Olivier Jeanne,Mr.Paolo Mauro,Mr.Jeronimo Zettelmeyer,Mr.Marcos Chamon Pdf

The debate on government debt in the context of possible reforms of the international financial architecture has thus far focused on crisis resolution. This paper seeks to broaden this debate. It asks how government debt could be structured to pursue other objectives, including crisis prevention, international risk-sharing, and facilitating the adjustment of fiscal variables to changes in domestic economic conditions. To that end, the paper considers recently developed analytical approaches to improving sovereign debt structure using existing instruments, and reviews a number of proposals--including the introduction of explicit seniority and GDP-linked instruments--in the sovereign context.

Overcoming Developing Country Debt Crises

Barry Herman,José Antonio Ocampo,Shari Spiegel
Overcoming Developing Country Debt Crises Book PDF

Author : Barry Herman,José Antonio Ocampo,Shari Spiegel
Publisher : OUP Oxford
Page : 532 pages
File Size : 50,6 Mb
Release : 2010-04-01
Category : Business & Economics
ISBN : 9780191614705

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Overcoming Developing Country Debt Crises by Barry Herman,José Antonio Ocampo,Shari Spiegel Pdf

Developing country debt crises have been a recurrent phenomenon over the past two centuries. In recent times sovereign debt insolvency crises in developing and emerging economies peaked in the 1980s and, again, from the middle 1990s to the start of the new millennium. Despite the fact that several developing countries now have stronger economic fundamentals than they did in the 1990s, sovereign debt crises will reoccur again. The reasons for this are numerous, but the central one is that economic fluctuations are inherent features of financial markets, the boom and bust nature of which intensify under liberalized financial environments that developing countries have increasingly adopted since the 1970s. Indeed, today we are in the midst of an almost unprecedented global "bust." The timing of the book is important. The conventional wisdom is that the international economic and financial system is broken. Policymakers in both the poorest and the richest countries are likely to seriously consider how to restructure the international trade and financial system, including how to resolve sovereign debt crises in a more effective and fair manner. This book calls for the international reform of sovereign debt workouts which derives from both economic theory and real-world experiences. Country case studies underline the point that we need to do better. This book recognizes that the politics of the international treatment of sovereign debt have not supported systemic reform efforts thus far; however, failure in the past does not preclude success in the future in an evolving international political environment, and the book thus puts forth alternative reform ideas for consideration.

Financial and Sovereign Debt Crises

Ms.Carmen Reinhart,Mr.Kenneth Rogoff
Financial and Sovereign Debt Crises Book PDF

Author : Ms.Carmen Reinhart,Mr.Kenneth Rogoff
Publisher : International Monetary Fund
Page : 21 pages
File Size : 52,8 Mb
Release : 2013-12-24
Category : Business & Economics
ISBN : 9781475552874

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Financial and Sovereign Debt Crises by Ms.Carmen Reinhart,Mr.Kenneth Rogoff Pdf

Even after one of the most severe multi-year crises on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging market counterparts. The current phase of the official policy approach is predicated on the assumption that debt sustainability can be achieved through a mix of austerity, forbearance and growth. The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression. As we document, this claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial Repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.

Structuring and Restructuring Sovereign Debt

Mr.Patrick Bolton,Mr.Olivier Jeanne
Structuring and Restructuring Sovereign Debt Book PDF

Author : Mr.Patrick Bolton,Mr.Olivier Jeanne
Publisher : International Monetary Fund
Page : 29 pages
File Size : 46,6 Mb
Release : 2007-08-01
Category : Business & Economics
ISBN : 9781451867565

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Structuring and Restructuring Sovereign Debt by Mr.Patrick Bolton,Mr.Olivier Jeanne Pdf

In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure ex post. We show however, that competition for repayment among lenders may result in a sovereign debt that is excessively difficult to restructure in equilibrium. This inefficiency may be alleviated by a suitably designed bankruptcy regime that facilitates debt restructuring.

The Dynamics of Sovereign Debt Crises and Bailouts

Mr.Francisco Roch,Harald Uhlig
The Dynamics of Sovereign Debt Crises and Bailouts Book PDF

Author : Mr.Francisco Roch,Harald Uhlig
Publisher : International Monetary Fund
Page : 46 pages
File Size : 53,9 Mb
Release : 2016-07-11
Category : Business & Economics
ISBN : 9781475581027

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The Dynamics of Sovereign Debt Crises and Bailouts by Mr.Francisco Roch,Harald Uhlig Pdf

Motivated by the recent European debt crisis, this paper investigates the scope for a bailout guarantee in a sovereign debt crisis. Defaults may arise from negative income shocks, government impatience or a "sunspot"-coordinated buyers strike. We introduce a bailout agency, and characterize the minimal actuarially fair intervention that guarantees the no-buyers-strike fundamental equilibrium, relying on the market for residual financing. The intervention makes it cheaper for governments to borrow, inducing them borrow more, leaving default probabilities possibly rather unchanged. The maximal backstop will be pulled precisely when fundamentals worsen.

Sovereign Debt

Vinod K. Aggarwal,Brigitte Granville
Sovereign Debt Book PDF

Author : Vinod K. Aggarwal,Brigitte Granville
Publisher : Chatham House (Formerly Riia)
Page : 312 pages
File Size : 47,8 Mb
Release : 2003
Category : Business & Economics
ISBN : STANFORD:36105114378420

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Sovereign Debt by Vinod K. Aggarwal,Brigitte Granville Pdf

This work examines the ongoing debate on resolving sovereign debt defaults and alleviating the debt burden of heavily indebted poor countries. Concentrating primarily on the period from the 1982 and focusing on money owed to both the public and the private sector, the volume examines the origins of debt crises, rescheduling tactics, and efforts to create a more enduring solution to the problem of coping with debt, as well as its efficacy. Policy recommendations are put forward for dealing with the onerous problem of debt default and rescheduling.

Sovereign Debt

Rob Quail
Sovereign Debt Book PDF

Author : Rob Quail
Publisher : John Wiley & Sons
Page : 435 pages
File Size : 53,5 Mb
Release : 2011-02-25
Category : Business & Economics
ISBN : 9781118017555

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Sovereign Debt by Rob Quail Pdf

An intelligent analysis of the dangers, opportunities, and consequences of global sovereign debt Sovereign debt is growing internationally at a terrifying rate, as nations seek to prop up their collapsing economies. One only needs to look at the sovereign risk pressures faced by Greece, Spain, and Ireland to get an idea of how big this problem has become. Understanding this dilemma is now more important than ever, that's why Robert Kolb has compiled Sovereign Debt. With this book as your guide, you'll gain a better perspective on the essential issues surrounding sovereign debt and default through discussions of national defaults, systemic risk, associated costs, and much more. Historical studies are also included to provide a realistic framework of reference. Contains up-to-date research and analysis on sovereign debt from today's leading practitioners and academics Details the dangers of defaults and their associated systemic risks Explores the past, present, and future of sovereign debt The repercussions of a national default are all-encompassing as global markets are intricately interwoven in the modern world. Sovereign Debt examines what it will take to overcome the challenges of this market and how you can deal with the uncertainty surrounding it.

Sovereign Debt Structure for Crisis Prevention

International Monetary Fund. Research Dept.
Sovereign Debt Structure for Crisis Prevention Book PDF

Author : International Monetary Fund. Research Dept.
Publisher : International Monetary Fund
Page : 94 pages
File Size : 45,6 Mb
Release : 2004-02-07
Category : Business & Economics
ISBN : 9781498330251

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Sovereign Debt Structure for Crisis Prevention by International Monetary Fund. Research Dept. Pdf

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Sovereign Debt Crises

Juan Pablo Bohoslavsky,Kunibert Raffer
Sovereign Debt Crises Book PDF

Author : Juan Pablo Bohoslavsky,Kunibert Raffer
Publisher : Cambridge University Press
Page : 309 pages
File Size : 53,5 Mb
Release : 2017-11-02
Category : Business & Economics
ISBN : 9781316510445

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Sovereign Debt Crises by Juan Pablo Bohoslavsky,Kunibert Raffer Pdf

Contributes to a better understanding of the policy, economic, and legal options of countries struggling with debt problems.

Debt Crises and the Development of International Capital Markets

Mr.Andrea Pescatori,Mr.Amadou N. R. Sy
Debt Crises and the Development of International Capital Markets Book PDF

Author : Mr.Andrea Pescatori,Mr.Amadou N. R. Sy
Publisher : International Monetary Fund
Page : 34 pages
File Size : 52,9 Mb
Release : 2004-03-01
Category : Business & Economics
ISBN : 9781451846447

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Debt Crises and the Development of International Capital Markets by Mr.Andrea Pescatori,Mr.Amadou N. R. Sy Pdf

Crises on external sovereign debt are typically defined as defaults. Such a definition accurately captures debt-servicing difficulties in the 1980s, a period of numerous defaults on bank loans. However, defining defaults as debt crises is problematic for the 1990s, when sovereign bond markets emerged. In contrast to the 1980s, the 1990s are characterized by significant foreign debt-servicing difficulties but fewer sovereign defaults. In order to capture this evolution of debt markets, we define debt crises as events occurring when either a country defaults or its bond spreads are above a critical threshold. We find that our definition outperforms the default-based definition in capturing debt-servicing difficulties and, consequently, in fitting the post-1994 period. In particular, liquidity indicators are significant in explaining our definition of debt crises, while they do not play any role in explaining defaults after 1994.

Debt Defaults and Lessons from a Decade of Crises

Federico Sturzenegger,Jeromin Zettelmeyer
Debt Defaults and Lessons from a Decade of Crises Book PDF

Author : Federico Sturzenegger,Jeromin Zettelmeyer
Publisher : MIT Press
Page : 399 pages
File Size : 46,5 Mb
Release : 2007-01-05
Category : Business & Economics
ISBN : 9780262195539

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Debt Defaults and Lessons from a Decade of Crises by Federico Sturzenegger,Jeromin Zettelmeyer Pdf

Detailed case studies of debt defaults by Russia, Ukraine, Pakistan, Ecuador, Moldova, and Uruguay, framed by a comprehensive discussion of the history, economic theory, legal issues, and policy lessons of sovereign debt crises. The debt crises in emerging market countries over the past decade have given rise to renewed debate about crisis prevention and resolution. In Debt Defaults and Lessons from a Decade of Crises, Federico Sturzenegger and Jeromin Zettelmeyer examine the facts, the economic theory, and the policy implications of sovereign debt crises. They present detailed case histories of the default and debt crises in seven emerging market countries between 1998 and 2005: Russia, Ukraine, Pakistan, Ecuador, Argentina, Moldova, and Uruguay. These accounts are framed with a comprehensive overview of the history, economics, and legal issues involved and a discussion from both domestic and international perspectives of the policy lessons that can be derived from these experiences. Sturzenegger and Zettelmeyer examine how each crisis developed, what the subsequent restructuring encompassed, and how investors and the defaulting country fared. They discuss the new theoretical thinking on sovereign debt and the ultimate costs entailed, for both debtor countries and private creditors. The policy debate is considered first from the perspective of policymakers in emerging market countries and then in terms of international financial architecture. The authors' surveys of legal and economic issues associated with debt crises, and of the crises themselves, are the most comprehensive to be found in the literature on sovereign debt and default, and their theoretical analysis is detailed and nuanced. The book will be a valuable resource for investors as well as for scholars and policymakers.

A Guide to Sovereign Debt Data

S. M. Ali Abbas,Mr.Kenneth Rogoff
A Guide to Sovereign Debt Data Book PDF

Author : S. M. Ali Abbas,Mr.Kenneth Rogoff
Publisher : International Monetary Fund
Page : 21 pages
File Size : 53,8 Mb
Release : 2019-09-13
Category : Business & Economics
ISBN : 9781513515137

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A Guide to Sovereign Debt Data by S. M. Ali Abbas,Mr.Kenneth Rogoff Pdf

The last decade or so has seen a mushrooming of new sovereign debt databases covering long time spans for several countries. This represents an important breakthrough for economists who have long sought to, but been unable to tackle, first-order questions such as why countries have differential debt tolerance, and how debt levels affect the scope for countercyclical policy in recessions and financial crises. This paper backdrops these recent data efforts, identifying both the key innovations, as well as caveats that users should be aware of. A Directory of existing publicly-available sovereign debt databases, featuring compilations by institutions and individual researchers, is also included.

The Impact of Bailouts on the Probability of Sovereign Debt Crises: Evidence from IMF-Supported Programs

Hippolyte W. Balima,Mr.Amadou N Sy
The Impact of Bailouts on the Probability of Sovereign Debt Crises Evidence from IMF Supported Programs Book PDF

Author : Hippolyte W. Balima,Mr.Amadou N Sy
Publisher : International Monetary Fund
Page : 38 pages
File Size : 51,5 Mb
Release : 2019-01-11
Category : Business & Economics
ISBN : 9781484393635

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The Impact of Bailouts on the Probability of Sovereign Debt Crises: Evidence from IMF-Supported Programs by Hippolyte W. Balima,Mr.Amadou N Sy Pdf

This paper studies the role of IMF-supported programs in mitigating the likelihood of subsequent sovereign defaults in borrowing countries. Using a panel of 106 developing countries from 1970 to 2016 and an entropy balancing methodology, we find that IMF-supported programs significantly reduce the likelihood of subsequent sovereign defaults. This finding is robust to different specifications of the entropy balancing and alternative identification strategies. Our results suggest that a country that signs a program with the IMF, typically experiences a slight improvement in its sovereign credit rating and a decrease in both government debt-to-GDP and fiscal deficit-to-GDP.

Sovereign Debt and the Financial Crisis

Carlos A. Primo Braga,Gallina A. Vincelette
Sovereign Debt and the Financial Crisis Book PDF

Author : Carlos A. Primo Braga,Gallina A. Vincelette
Publisher : World Bank Publications
Page : 524 pages
File Size : 41,5 Mb
Release : 2010-11-16
Category : Business & Economics
ISBN : 0821385437

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Sovereign Debt and the Financial Crisis by Carlos A. Primo Braga,Gallina A. Vincelette Pdf

The book presents and discusses policy-relevant research on the current debt challenges which developing, emerging market and developed countries face. Its value added lies in the integrated approach of drawing on theoretical research and evidence from practitioners' experience in developing and emerging market countries.