The authors further develop such a market-based approach for situations in which claimants are severely cash-constrained and there is good reason for existing owner-managers to remain in control. Under the ACCORD scheme-Auction-based Creditor Ordering by Reducing Debts-creditors remain creditors...

The debt burden facing a number of low-income countries has received considerable international attention. The international development community has begun to recognize that options aimed at providing debt relief to countries where debt is not sustainable needs to be seriously explored. In this...

Debate about the effectiveness of foreign aid has intensified in recent years, as budgetary pressures on aid have increased in donor countries. Whatever the merits of opposing arguments, the question is: do conventional measures of aid (such as OECD's Net ODA), which lump together grants and...

The role of debt forgiveness is to alleviate what is known as"debt overhang". This concept is the core idea of the Brady deals, and it now comes to the African debt crisis. How can one gauge the hypothesis of the debt overhang? To what extent can one attribute the growth slowdown of the 1990s to...

The authors analyze the implications of inefficient financial intermediation for dbt management, using a model in which firms rely on bank credit to finance their working capital needs, and, lenders face a high state verification and enforcement costs of loan contracts. Their analysis shows that...

To understand the fiscal position of a country, contingent liabilities and other sources of fiscal risk need to be considered. The authors develop a framework to assess and manage fiscal risk in Bulgaria. Bulgaria's Currency Board Arrangement has effectively imposed fiscal discipline, but leaves...

The recent East Asian financial crisis provides a natural experiment for investigating foreign exchange risk management by nonfinancial corporations. During this period, the financial crisis exposed local firms to large depreciations in exchange rates and reduced access to foreign capital. The...

Subnational debt markets can be a powerful force in a country's development. Through delegated monitoring by financial intermediaries and through debt placed directly with investors, subnational debt markets account for about 5 percent of GDP in Argentina and Brazil. But they remain embryonic in...

It is easy to say that the International Monetary Fund should not resort to financial rescue for countries in crisis; this is hard to do when there is no alternative. That is where collective action clauses come in. Collective action clauses are designed to facilitate debt restructuring by the...

Some payment arrangements are more efficient in promoting economic growth in a market-based economy. The payment experience of industrial countries is diverse enough to identify those payment arrangements that provide the infrastructure for sustained growth and the emergence of market-based...