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

As emerging and developing economies accumulate more domestic sovereign debt, it is likely to play a larger role in the resolution of future sovereign debt crises. This paper analyzes when and how to restructure sovereign domestic debt in unsustainable debt cases while minimizing economic and...

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...

In April 2006, the Executive Boards of the Bank and the Fund reviewed the debt sustainability framework (DSF) for low-income countries and the implications of the multilateral debt relief initiative. Directors thought that the DSF was broadly appropriate and that no major changes were warranted,...

The Bank-Fund Debt Sustainability Framework (DSF) is a standardized framework for analyzing debt-related vulnerabilities in low-income countries (LICs). It aims to help countries monitor their debt burden and take early preventive action, to provide guidance to creditors in ensuring their...

This note examines the efficiency gains that might result from market-based debt reduction and alternative uses of resources. It is argued that when a country’s expected output falls short of contractual claims on that output, private investment is drawn to activities that protect the...