This paper follows up on the Executive Board's December 2002 discussion of the design of the Sovereign Debt Restructuring Mechanism and seeks to make further progress on the formulation of a concrete proposal for a statutory sovereign debt restructuring mechanism

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

This paper employs a dynamic bargaining-theoretic framework to analyze multilateral sovereign debt rescheduling negotiations. The analysis illustrates how various factors, such as the debtor’s gains from trade and the level of world interest rates, affect the relative bargaining power of...

This paper outlines a procedure for calculating the cash value of “menu items” in debt restructuring proposals, including par and non-par exchanges, with enhancements consisting of either interest or principal guarantees. It is argued that under certain plausible assumptions interest and...

This paper identifies contractual reforms designed to address collective action problems in sovereign debt restructuring. Since any decisions regarding the design of contractual provisions will need to be made by the sovereign issuer and its creditors, it is recognized that the Fund's primary...

This paper reviews implications for financial and fiscal programming of different treatments of external debt rescheduling. Adjustment formulas are derived to ensure invariance of the macroeconomic outcome. An important consideration is the impact on the income position of the central bank. The...