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The Eurozone sovereign debt crisis began in the spring of 2010. Seven years on seems like an appropriate point at which to critique how the crisis has been handled and to assess whether policy changes will be required should it flare up again. In particular, there are a number of lessons to be...
Persistent link: https://www.econbiz.de/10012951713
This paper studies the relationship between sovereign debt default and annual GDP growth taking into account the depth of a debt restructuring and distinguishing between private and official deals, as well as between debt flow and stock reduction. Analyzing 520 restructuring episodes, over the...
Persistent link: https://www.econbiz.de/10012908137
We offer an analytical framework for studying "pre-emptive" debt exchanges. Countries can tailor a sovereign bankruptcy framework by choosing provisions (or "haircuts") ex ante, but must contend with the market discipline of holdout litigation ex post. Secondary markets play a role in shaping...
Persistent link: https://www.econbiz.de/10012898445
This article discusses the impetus for, key features of, and recent experience in implementing reforms to international sovereign debt contracts. Recognizing the vulnerabilities in the existing contractual framework for sovereign debt restructuring, the IMF in 2014 endorsed reforms to collective...
Persistent link: https://www.econbiz.de/10012936523
This paper argues that sovereign debt restructurings as agreed between defaulting states and their multilateral, bilateral, or private creditors constitute exercises of international public authority. Their authoritative character results from their effects on the citizens of the defaulting...
Persistent link: https://www.econbiz.de/10012940180
Restructuring of sovereign debt faces conflicts between participating creditors who negotiate a settlement with a sovereign debtor in distress and holdout creditors who aggressively pursue a litigation strategy to recover all amounts due. Such conflicts have been exacerbated by the ruling of a...
Persistent link: https://www.econbiz.de/10012759320
Sovereigns' public capital influences sovereign debt crises and resolution. We compile a dataset on public expenditure composition around restructurings with private external creditors. We show that during restructurings, public investment (i) experiences severe decline and slow recovery, (ii)...
Persistent link: https://www.econbiz.de/10012824991
Over the past 40 years, the International Monetary Fund (IMF) has played a central role in the sovereign debt restructuring process. If the COVID-19 pandemic leads to a significant wave of sovereign debt distress, this role will be closely scrutinized. The paper analyzes how IMF policies have...
Persistent link: https://www.econbiz.de/10012826440
European economic governance is again under the spotlight. Several reform proposals have been put forward in recent years, including new arrangements for the management and resolution of sovereign debt crises. This note purports to: (a) critically review earlier debates on the reform of the...
Persistent link: https://www.econbiz.de/10012867382
This paper discusses some of the legal aspects of Collective Action Clauses (CACs) in the context of the Eurozone and then approaches the broader economic issue of why it may be useful to have more efficient CACs, such as single-limb CACs, and when and in what circumstances it may be appropriate...
Persistent link: https://www.econbiz.de/10012870838