To make the no-bailout clause credible and enhance the effectiveness of crisis assistance, a consistent institutional and legal framework is needed to ensure that private creditors contribute to crisis resolution. Getting activated as part of ESM crisis assistance, we propose a two-stage...

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...

The doctrine of state succession requires that governments honor the international commitments of their predecessors. Even if a dictator borrows to oppress his own citizens, future generations are required to service the debts and commitments contracted by the dictator. This paper starts by...

This paper focuses on the significant growth of domestic credit once the debt is restructured, and shows that it is not correlated with the size of the haircut. Second, it performs an event study around Ecuador’s sovereign default and restructuring of 2008–2009 to study changes in domestic bank...

This study investigates the reaction of stock prices to sovereign debt restructurings and credit rating reviews in six frontier stock markets. The study uses the event study methodology corrected for the impact of thin trading to investigate stock market reaction to sovereign debt restructurings...

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...

This chapter adopts the working assumption that it is conceivable that at some time in the future it would be in the interest of the United States to restructure its sovereign debt (i.e., to reduce the principal amount). It addresses in particular U.S. Treasury Securities. The chapter first...

The model presented in this paper shows that the outcome of a leveraged buyback of sovereign debt depends on the seniority structure of the deal. If the institution lending the funds needed for the buyback is senior, the debtor country benefits from the deal and the market price of bonds...

The wave of sovereign defaults in the early 1980s and the string of debt crises in subsequent decades have fostered proposals involving policy interventions in sovereign debt restructurings. The global financial crisis and the recent global pandemic have further reignited this discussion among...