In case of multiple creditors a coordination problem can arise when the borrowingfirm runs into financial distress …. Even if the project's value at maturity is enoughto pay all creditors in full, some creditors may be tempted to foreclose … on theirloans. We develop a model of creditor coordination where a large creditor movesbefore a continuum of small …

coordination of creditors of another country. We find, however, that the contagious e.ects on the price of debt precipitated … simultaneous investment decision into two assets, which are subject to correlated fundamental states, as a coordination problem … through correlation are modest. Hence, assuming that investors behave as modeled in the global game, we conclude that …

creditors the option to delay their foreclosure decision rather than obliging them to simultaneous actions as suggested by … diminishes creditor coordination failure whenever the firm is expected to be in distress. …

projects is determined separately. Nevertheless, correlation of signals may give rise to spillovers through informational … correlation does not promote pronounced contagious effects. In particular, this is consistent with the theoretical two …-dimensional global games solution of the underlying investment game. However, a heuristic of neglecting correlation and signals about the …

creditors and that several interventions in sequence may be necessary to avert an impending crisis. Absent of the IMF …

diminishes their incentives to thwart default. This paper introduces a model of coordination failure to analyze how a … other creditors. We find that the relationship bank's signaling ability enhances its incentives to engage in forbearance …