Portugal's economy faced severe crisis during the global economic and financial crisis. In this context, Portugal's authorities have put forward an economically well-balanced program that will focus on structural reforms to boost growth and employment, ensure balanced fiscal sustainability,...

Grenada quickly recovered from the devastating effects of Hurricane Ivan. Executive Directors welcomed the economic reform program aimed to promote economic growth, restore fiscal and debt sustainability, reduce vulnerabilities, and alleviate poverty. They emphasized the need to strengthen the...

This paper discusses key findings of the 2006 Regional Discussions on the Eastern Caribbean Currency Union. Fiscal revenues have improved, but there has been only a modest improvement in the fiscal and debt positions. Tax revenues have strengthened with the uptick in economic activity,...

We develop an early-warning model of sovereign debt crises. A country is defined to be in a debt crisis if it is classified as being in default by Standard & Poor's, or if it has access to nonconcessional IMF financing in excess of 100 percent of quota. By means of logit and binary recursive...

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...

We examine the determinants of external crises, focusing on the role of foreign liabilities and their composition. Using a variety of statistical tools and comprehensive data spanning 1970-2011, we find that the ratio of net foreign liabilities (NFL) to GDP is a significant crisis predictor, and...

The paper examines the evolution of public sector debt levels and structures in 12 emerging market countries around the time of financial crises. In particular, it focuses on whether the debt situation of sovereign borrowers became more vulnerable in the aftermath of crises. The principal...

Several papers argue that debt crises can be the result of self-fulfilling expectations that no one will lend to a country. I show this type of coordination failure can be eliminated by a combination of state-contingent securities and a mechanism that allows investors to promise to lend only if...

Improved macroeconomic conditions and changes to the asset-liability structure on Turkish balance sheets since the 2001 crisis have improved Turkey's overall sovereign risk profile. Nonetheless, the country remains subject to bouts of volatility, as evidenced most recently in the May/June 2006...

We construct a financial vulnerability indicator that is consistent with the theoretical literature on determinants of defaults. It is based on the amount of new foreign financing that is needed to avoid a default or an import adjustment, expressed as a proportion of the country's sources of...