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Eaton, Jonathan - 1995

We review the literature on sovereign debt. We organize our survey around three central questions: (1) Why do sovereign debtors ever repay their debts? (2) What burdens, in the form of distortions and inefficiencies, does sovereign debt impose? and (3) How might debt be restructured to reduce...

Persistent link: https://www.econbiz.de/10012473755

Security Baskets and Index-Linked Securities

Gorton, Gary - 1991

Security baskets and index-lined securities are securities whose values are functions of the cash flows or values of … other assets. Creation of these "composite" securities would seem to be redundant since investors can cost1ess1y replicate … them. In this paper we study the existence and optimal design of composite securities. We first show that when some …

Persistent link: https://www.econbiz.de/10012475296

Selective Swap Arrangements and the Global Financial Crisis : Analysis and Interpretation

Aizenman, Joshua - 2009

The onset of the US credit crisis in 2008, and its rapid globalization induced the FED to extend unprecedented swap-lines of 30 billion dollars to four emerging markets, and the proliferation of other cross-countries selective swap arrangements. This paper explores the logic for these...

Persistent link: https://www.econbiz.de/10012463826

Debt Restructuring

Friedman, Benjamin M. - 2000

What difference does it make, and for whom, whether the nonperforming debts of emerging market borrowers are restructured? This paper begins by positing a set of counterfactual conditions under which restructuring would not matter, and then shows how several ways in which the actual world of...

Persistent link: https://www.econbiz.de/10012471039

Holdouts in Sovereign Debt Restructuring : A Theory of Negotiation in a Weak Contractual Environment

Pitchford, Rohan - 2010

Why is it difficult to restructure sovereign debt in a timely manner? In this paper we present a theory of the sovereign debt restructuring process in which delay arises as individual creditors hold-up a set- tlement in order to extract greater payments from the sovereign. We then use the theory...

Persistent link: https://www.econbiz.de/10012462026

Crisis Resolution : Next Steps

Eichengreen, Barry - 2003

At the April 2003 meeting of the International Monetary and Financial Committees, it was decided to further encourage the contractual approach to smoothing the process of sovereign debt restructuring by encouraging the more widespread use of collective action clauses (CACs) in international...

Persistent link: https://www.econbiz.de/10012468599

Sargent-Wallace Meets Krugman-Flood-Garber, or : Why Sovereign Debt Swaps Don't Avert Macroeconomic Crises

Aizenman, Joshua - 2002

This paper argues that the frequent failure of the debt swaps is not an accident. Instead, it follows from fundamental forces driven by the market's assessment of the scarcity of fiscal revenue relative to the demand for fiscal outlays. It follows from the observation that arbitrage forces...

Persistent link: https://www.econbiz.de/10012469520

Sovereign Debt Restructurings : Panacea or Pangloss?

Bulow, Jeremy I. - 1988

The most widely proposed LDC debt plans are flawed by their failure to recognize the fundamental differences between corporate and sovereign debt. Consequently, many plans intended to help highly-indebted countries mainly aid their foreign creditors. This paper emphasizes the crucial distinction...

Persistent link: https://www.econbiz.de/10012476435

Take the Short Route : Equilibrium Default and Debt Maturity

Aguiar, Mark - 2016

We study the interactions between sovereign debt default and maturity choice in a setting with limited commitment for repayment as well as future debt issuances. Our main finding is that under a wide range of conditions the sovereign should, as long as default is not preferable, remain passive...

Persistent link: https://www.econbiz.de/10012455833

Take the Short Route : How to Repay and Restructure Sovereign Debt with Multiple Maturities

Aguiar, Mark - 2013

We address the question of whether and how a sovereign should reduce its external indebtedness when default is a significant possibility, with a particular focus on whether a sovereign should buy back or dilute existing long-term sovereign bonds. Our main finding is that when reduction of debt...

Persistent link: https://www.econbiz.de/10012458946

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