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 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 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 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 Selected Issues paper analyzes household savings ratio in Spain. The household savings ratio has fallen to its lowest historical rate in 2012, as households cut back savings to support consumption in response to negative income shocks. Household savings fell across all households, but the...

This staff report discusses Seychelles 2013 Article IV Consultation, Seventh Review Under the Extended Arrangement and Request for Modification of Performance Criterion. The repayment of domestic debt, a preference for foreign financing, and shallow domestic financial markets have resulted in...

This 2013 Article IV Consultation highlights that Iceland’s economy is on a path to recovery, but legacy vulnerabilities are weighing on growth. GDP growth—which reached 2.9 percent in 2011—slowed to 1.6 percent in 2012 amid private sector deleveraging and weak external...