Trade Costs Of Sovereign Debt Restructurings

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Trade Costs of Sovereign Debt Restructurings

Mr.Tamon Asonuma,Marcos Chamon,Akira Sasahara
Trade Costs of Sovereign Debt Restructurings Book PDF

Author : Mr.Tamon Asonuma,Marcos Chamon,Akira Sasahara
Publisher : International Monetary Fund
Page : 57 pages
File Size : 45,7 Mb
Release : 2016-11-15
Category : Business & Economics
ISBN : 9781475553956

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Trade Costs of Sovereign Debt Restructurings by Mr.Tamon Asonuma,Marcos Chamon,Akira Sasahara Pdf

Sovereign debt restructurings have been shown to influence the dynamics of imports and exports. This paper shows that the impact can vary substantially depending on whether the restructuring takes place preemptively without missing payments to creditors, or whether it takes place after a default has occurred. We document that countries with post-default restructurings experience on average: (i) a more severe and protracted decline in imports, (ii) a larger fall in exports, and (iii) a sharper and more prolonged decline in both GDP, investment and real exchange rate than preemptive cases. These stylized facts are confirmed by panel regressions and local projection estimates, and a range of robustness checks including for the endogeneity of the restructuring strategy. Our findings suggest that a country’s choice of how to go about restructuring its debt can have major implications for the costs it incurs from restructuring.

Costs of Sovereign Defaults: Restructuring Strategies, Bank Distress and the Capital Inflow-Credit Channel

Mr.Tamon Asonuma,Mr.Marcos d Chamon,Aitor Erce,Akira Sasahara
Costs of Sovereign Defaults Restructuring Strategies Bank Distress and the Capital Inflow Credit Channel Book PDF

Author : Mr.Tamon Asonuma,Mr.Marcos d Chamon,Aitor Erce,Akira Sasahara
Publisher : International Monetary Fund
Page : 91 pages
File Size : 50,8 Mb
Release : 2019-03-25
Category : Business & Economics
ISBN : 9781498303255

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Costs of Sovereign Defaults: Restructuring Strategies, Bank Distress and the Capital Inflow-Credit Channel by Mr.Tamon Asonuma,Mr.Marcos d Chamon,Aitor Erce,Akira Sasahara Pdf

Sovereign debt restructurings are associated with declines in GDP, investment, bank credit, and capital flows. The transmission channels and associated output and banking sector costs depend on whether the restructuring takes place preemptively, without missing payments to creditors, or whether it takes place after a default has occurred. Post-default restructurings are associated with larger declines in bank credit, an increase in lending interest rates, and a higher likelihood of triggering a banking crisis than pre-emptive restructurings. Our local projection estimates show large declines in GDP, investment, and credit amplified by severe sudden stops and transmitted through a “capital inflow-credit channel”.

Sovereign Debt Restructurings 1950-2010

Mr.Udaibir S. Das,Mr.Michael G Papaioannou,Christoph Trebesch
Sovereign Debt Restructurings 1950 2010 Book PDF

Author : Mr.Udaibir S. Das,Mr.Michael G Papaioannou,Christoph Trebesch
Publisher : International Monetary Fund
Page : 128 pages
File Size : 42,6 Mb
Release : 2012-08-01
Category : Business & Economics
ISBN : 9781475505535

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Sovereign Debt Restructurings 1950-2010 by Mr.Udaibir S. Das,Mr.Michael G Papaioannou,Christoph Trebesch Pdf

This paper provides a comprehensive survey of pertinent issues on sovereign debt restructurings, based on a newly constructed database. This is the first complete dataset of sovereign restructuring cases, covering the six decades from 1950–2010; it includes 186 debt exchanges with foreign banks and bondholders, and 447 bilateral debt agreements with the Paris Club. We present new stylized facts on the outcome and process of debt restructurings, including on the size of haircuts, creditor participation, and legal aspects. In addition, the paper summarizes the relevant empirical literature, analyzes recent restructuring episodes, and discusses ongoing debates on crisis resolution mechanisms, credit default swaps, and the role of collective action clauses.

Sovereign Debt Restructuring and Growth

Lorenzo Forni,Mr.Geremia Palomba,Ms.Joana Pereira,Christine J. Richmond
Sovereign Debt Restructuring and Growth Book PDF

Author : Lorenzo Forni,Mr.Geremia Palomba,Ms.Joana Pereira,Christine J. Richmond
Publisher : International Monetary Fund
Page : 42 pages
File Size : 48,9 Mb
Release : 2016-07-22
Category : Business & Economics
ISBN : 9781498382236

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Sovereign Debt Restructuring and Growth by Lorenzo Forni,Mr.Geremia Palomba,Ms.Joana Pereira,Christine J. Richmond Pdf

This paper studies the effect of sovereign debt restructurings with external private creditors on growth during the period 1970-2010. We find that there are bad and good (or not so bad) debt restructurings for growth. While growth generally declines in the aftermath of a sovereign debt restructuring, agreements that allow countries to exit a default spell (final restructurings) are associated with improving growth. The impact can be significant. In general, three years after restructuring, growth is about 5 percent lower compared to countries that did not face restructuring over the same period. The exception is for final restructurings, which result in positive growth in the years immediately after the restructuring. Final restructurings tend to be better for growth because they reduce countries’ debt, with the strongest effect for countries that exit restructurings with relatively low debt levels.

Considerations in the Choice of the Appropriate Discount Rate for Evaluating Sovereign Debt Restructurings

Ms.Julie Kozack
Considerations in the Choice of the Appropriate Discount Rate for Evaluating Sovereign Debt Restructurings Book PDF

Author : Ms.Julie Kozack
Publisher : International Monetary Fund
Page : 29 pages
File Size : 53,6 Mb
Release : 2005-12-01
Category : Business & Economics
ISBN : 9781451975840

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Considerations in the Choice of the Appropriate Discount Rate for Evaluating Sovereign Debt Restructurings by Ms.Julie Kozack Pdf

Assessments regarding the effectiveness of sovereign debt restructurings are often summarized by comparisons of the net present value of debt service before and after the restructuring. These calculations are inherently sensitive to the choice of discount rate. This paper explores issues that arise in selecting discount rates when evaluating sovereign debt restructurings. It suggests using a range of discount rates and centering the analysis around the internal rate of return to assess whether the debt restructuring has generated net present value savings or costs to the debtor.

Sovereign Debt

Mr. Leonardo Martinez,Mr. Francisco Roch,Francisco Roldán,Mr. Jeromin Zettelmeyer
Sovereign Debt Book PDF

Author : Mr. Leonardo Martinez,Mr. Francisco Roch,Francisco Roldán,Mr. Jeromin Zettelmeyer
Publisher : International Monetary Fund
Page : 47 pages
File Size : 53,5 Mb
Release : 2022-06-17
Category : Business & Economics
ISBN : 9798400213250

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Sovereign Debt by Mr. Leonardo Martinez,Mr. Francisco Roch,Francisco Roldán,Mr. Jeromin Zettelmeyer Pdf

This paper surveys the literature on sovereign debt from the perspective of understanding how sovereign debt differs from privately issue debt, and why sovereign debt is deemed safe in some countries but risky in others. The answers relate to the unique power of the sovereign. One the one hand, a sovereign has the power to tax, making debt relatively safe; on the other, it also has control over its territory and most of its assets, making debt enforcement difficult. The paper discusses debt contracts and the sovereign debt market, sovereign debt restructurings, and the empirical and theoretical literatures on the costs and causes of defaults. It describes the adverse impact of sovereign default risk on the issuing countries and what explains this impact. The survey concludes with a discussion of policy options to reduce sovereign risk, including fiscal frameworks that act as commitment devices, state-contingent debt, and independent and credible monetary policy.

Serial Sovereign Defaults and Debt Restructurings

Mr.Tamon Asonuma
Serial Sovereign Defaults and Debt Restructurings Book PDF

Author : Mr.Tamon Asonuma
Publisher : International Monetary Fund
Page : 25 pages
File Size : 51,7 Mb
Release : 2016-03-16
Category : Business & Economics
ISBN : 9781513596648

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Serial Sovereign Defaults and Debt Restructurings by Mr.Tamon Asonuma Pdf

Emerging countries that have defaulted on their debt repayment obligations in the past are more likely to default again in the future than are non-defaulters even with the same external debt-to-GDP ratio. These countries actually have repeated defaults or restructurings in short periods. This paper explains these stylized facts within a dynamic stochastic general equilibrium framework by explicitly modeling renegotiations between a defaulting country and its creditors. The quantitative analysis of the model reveals that the equilibrium probability of default for a given debt-to-GDP level is weakly increasing with the number of past defaults. The model also accords with an additional fact: lower recovery rates (high NPV haircuts) are associated with increases in spreads at renegotiation.

Sovereign Debt

Mr.Vivek B. Arora
Sovereign Debt Book PDF

Author : Mr.Vivek B. Arora
Publisher : International Monetary Fund
Page : 42 pages
File Size : 45,5 Mb
Release : 1993-07
Category : Business & Economics
ISBN : UCSD:31822015235666

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Sovereign Debt by Mr.Vivek B. Arora Pdf

This paper surveys the literature on sovereign debt that deals with the issues of a country’s ability-to-pay, its willingness-to-pay, and the policy responses to the debt crisis of the 1980s. The existence of an ability-to-pay problem suggests a need for debt reduction, but plans for debt relief face potential incentive problems, and sovereign debt repurchases are not always a welfare maximizing method of debt restructuring. The paper synthesizes the main conclusions on these issues. With a willingness-to-pay problem, the potential penalties for debt repudiation are important in the endogenous determination of the repayment outcome. Penalties that are intertemporal in nature have different implications for debt repudiation than do intratemporal penalties. In addition, the asymmetric distribution of the costs of default can lead to a recurrent cycle of debt accumulation and default.

Sovereign Debt

S. Ali Abbas,Alex Pienkowski,Kenneth Rogoff
Sovereign Debt Book PDF

Author : S. Ali Abbas,Alex Pienkowski,Kenneth Rogoff
Publisher : Oxford University Press, USA
Page : 455 pages
File Size : 50,9 Mb
Release : 2019
Category : Business & Economics
ISBN : 9780198850823

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Sovereign Debt by S. Ali Abbas,Alex Pienkowski,Kenneth Rogoff Pdf

This book is an attempt to build some structure around the issues of sovereign debt to help guide economists, practitioners, and policymakers through this complicated, but not intractable, subject.

Sovereign Debt Restructurings in Belize

Mr.Tamon Asonuma,Gerardo Peraza,Kristine Vitola,Mr.Takahiro Tsuda
Sovereign Debt Restructurings in Belize Book PDF

Author : Mr.Tamon Asonuma,Gerardo Peraza,Kristine Vitola,Mr.Takahiro Tsuda
Publisher : International Monetary Fund
Page : 28 pages
File Size : 52,9 Mb
Release : 2014-07-22
Category : Business & Economics
ISBN : 9781498369510

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Sovereign Debt Restructurings in Belize by Mr.Tamon Asonuma,Gerardo Peraza,Kristine Vitola,Mr.Takahiro Tsuda Pdf

This paper examines the causes, processes, and outcomes of the two Belize sovereign debt restructurings in 2006–07 and in 2012–13 that occurred outside of an IMF-supported program. It finds that the motivation for the two debt restructurings differed, as the former was driven by external liquidity concerns while the latter was motivated by a substantial increase in the coupon rates and future fiscal solvency concerns. Despite differential treatment between residents and non-residents, both 2006–07 and 2012–13 debt exchanges were executed through collaborative engagement, due in part to the existence of a broad-based creditor committee and the authorities’ effective communication strategy. However, while providing temporary liquidity relief, neither of the debt restructurings properly addressed long-term debt sustainability concerns. Going forward, the success of the 2012–13 debt restructuring will still depend on the country’s ability to strengthen fiscal efforts and public debt management framework.

Sovereign Debt

Rob Quail
Sovereign Debt Book PDF

Author : Rob Quail
Publisher : John Wiley & Sons
Page : 435 pages
File Size : 43,8 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.

A Survey of Experiences with Emerging Market Sovereign Debt Restructurings

International Monetary Fund. Monetary and Capital Markets Department
A Survey of Experiences with Emerging Market Sovereign Debt Restructurings Book PDF

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 29 pages
File Size : 46,5 Mb
Release : 2012-05-06
Category : Business & Economics
ISBN : 9781498340472

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A Survey of Experiences with Emerging Market Sovereign Debt Restructurings by International Monetary Fund. Monetary and Capital Markets Department Pdf

This paper takes stock of past episodes of debt restructuring and reviews the relevant literature. Based on cross-country experience from the late 1990s through 2010 of emerging markets it offers some stylized facts.

Restructuring Domestic Sovereign Debt: An Analytical Illustration

Mr. David A. Grigorian
Restructuring Domestic Sovereign Debt An Analytical Illustration Book PDF

Author : Mr. David A. Grigorian
Publisher : International Monetary Fund
Page : 29 pages
File Size : 46,9 Mb
Release : 2023-02-03
Category : Business & Economics
ISBN : 9798400232541

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Restructuring Domestic Sovereign Debt: An Analytical Illustration by Mr. David A. Grigorian Pdf

Sovereign domestic debt restructurings have become more common in recent years and touched upon a growing share of total public debt. This paper offers a simple framework for policymakers to think about the decision whether to restructure domestic sovereign debt as part of an effort to reduce overall public indebtedness. It also highlights a rather wide range of technical, legal, and operational issues a sovereign may face while restructuring domestic debt. As expected, factors such as debt reduction required to achieve sustainability, fiscal savings from a restructuring, and economic costs of a restructuring are key inputs into the decision making regarding a restructuring, but so are factors such as the composition of debt, financial stability costs, and crisis preparedness, all of which are discussed in the paper.

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 : 42,9 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 Cost of Aggressive Sovereign Debt Policies

Christoph Trebesch
The Cost of Aggressive Sovereign Debt Policies Book PDF

Author : Christoph Trebesch
Publisher : International Monetary Fund
Page : 37 pages
File Size : 45,8 Mb
Release : 2009-02-01
Category : Business & Economics
ISBN : 9781451871760

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The Cost of Aggressive Sovereign Debt Policies by Christoph Trebesch Pdf

This paper proposes a new empirical measure of cooperative versus conflictual crisis resolution following sovereign default and debt distress. The index of government coerciveness is presented as a proxy for excusable versus inexcusable default behaviour and used to evaluate the costs of default for the domestic private sector, in particular its access to international debt markets. Our findings indicate that unilateral, aggressive sovereign debt policies lead to a strong decline in corporate access to external finance (loans and bond issuance). We conclude that coercive government actions towards external creditors can have strong signalling effects with negative spillovers on domestic firms. "Good faith" debt renegotiations may be crucial to minimize the domestic costs of sovereign defaults.