November 1999 - Financial reorganization under bankruptcy reduces a firm's debts to serviceable levels through negotiations overseen by courts. Academics have suggested using markets for such negotiations, giving equity holders and junior claimants call options to buy the firm back from senior...

Capital flows to the nonindustrial countries share three striking characteristics. First, the bulk of these flows was in the form of debt, not equity; second, the loans were mostly to, or guaranteed by, debtor governments; and third, these debts were largely bank loans, not bonds. This paper...