## 2. Gross and Net Fiscal Cost of DDRs ## Source details **Canonical URL:** [2. Gross and Net Fiscal Cost of DDRs](https://www.imf.org/-/media/files/publications/wp/2023/english/wpiea2023024-print-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/wp/2023/english/wpiea2023024-print-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/wp/2023/english/wpiea2023024-print-pdf.pdf.json) --- ### Key context and motivation - Domestic Debt Restructurings (DDRs) have increased in number and importance; domestic securities market volume is much larger than international sovereign debt markets. - In Emerging Markets and Developing Economies (EMDEs) the share of domestic debt in total debt rose from 31 to 46 percent from 2000 to 2020. - Success of a DDR should be measured by its ability to restore debt sustainability and market access, including restoration of credit to the economy (private and public sectors). - This chapter builds on IMF (2021) to operationalize concepts used in DDRs and to analyze net vs. gross relief and the DDR Laffer Curve. ### IMF decision framework (six steps) - Step 1: Estimate the debt relief target (DRT) necessary to restore public debt sustainability. - Step 2: Identify the perimeter of claims (i.e., instrument type) and categories of creditors holding “restructurable debt”. - Step 3: For each category of creditors, determine the potential contribution to DRT. - Step 4: Assess the economic costs associated with obtaining relief. - Step 5: Ensure the normal operation of the Central Bank (CB), including of the payments system, and assess the need for any immediate (or future) recapitalization(s) needs. - Step 6: Determine which claims to restructure in order to minimize overall costs while also achieving the DRT and supporting broader macroeconomic reforms. ### Gross vs. Net relief and the DDR Laffer Curve (conceptual) - Domestic restructurings impose direct costs on the local financial system, reducing the fiscal savings for the sovereign (negative externality). - Recapitalization and financial stability costs are likely increasing functions of the haircut; beyond a certain haircut the marginal net debt relief becomes negative. - The maximum beneficial haircut can be found iteratively by estimating recapitalization and financial stability costs associated with each haircut level. - Banks are emphasized given their size relative to NBFIs, but DDR design should also account for pension funds and insurance companies where relevant. ### Stylized example — bank balance-sheet impact by haircut (selected scenario calculations) - Banks hold government securities and loans; liabilities are unchanged; equity = assets − liabilities. - Pre-restructuring CAR of aggregate banking sector: 15 percent; regulatory requirement: 12 percent. - Assumption: loan impairment ratio is an increasing function of haircut. - Assumption used for public recapitalization adjustment in example: $400 (sum of liquidations/private replenishments), so fiscal recapitalization = (capital shortfall − $400) if shortfall > $400. - Haircut 0 percent - Loan impairment 0 percent - Gov. bonds 2,000; Loans 8,000; Liabilities 9,000; Equity 1,000 - Memo: CAR 12.5% - Shortfall 0 - Haircut 10 percent - Loan impairment 1 percent - Gov. bonds 1,800; Loans 7,920; Liabilities 9,000; Equity 720 - Memo: CAR 9.1% - Shortfall 230 - Haircut 20 percent - Loan impairment 2 percent - Gov. bonds 1,600; Loans 7,840; Liabilities 9,000; Equity 440 - Memo: CAR 5.6% - Shortfall 501 - Haircut 30 percent - Loan impairment 4 percent - Gov. bonds 1,400; Loans 7,680; Liabilities 9,000; Equity 80 - Memo: CAR 1.0% - Shortfall 842 - Haircut 40 percent - Loan impairment 7 percent - Gov. bonds 1,200; Loans 7,440; Liabilities 9,000; Equity (360) - Memo: CAR -4.8% - Shortfall 1,253 - Haircut 50 percent - Loan impairment 11 percent - Gov. bonds 1,000; Loans 7,120; Liabilities 9,000; Equity (880) - Memo: CAR -12.4% - Shortfall 1,734 - Haircut 60 percent - Loan impairment 15 percent - Gov. bonds 800; Loans 6,800; Liabilities 9,000; Equity (1,400) - Memo: CAR -20.6% - Shortfall 2,216 ### Summary finance-impact table excerpts (values preserved) - Haircut / Capital shortfall (below 12% CAR) / Public recap. cost (Shortfall above $400) / Gross debt relief (Haircut * Gov bonds) / Net debt relief (GDR − Public recap. cost) - 0 / 0.0 / 0.0 / 0.0 / 0.0 - 10 / 230.4 / 0.0 / 200 / 0.0 - 20 / 500.8 / 100.8 / 400 / 299.2 - 30 / 841.6 / 441.6 / 600 / 158.4 - 40 / 1,253.2 / 852.8 / 800 / -52.8 - 50 / 1,734.4 / 1,334.4 / 1,000 / -334.4 - 60 / 2,216.0 / 1,816.0 / 1,200 / -616.0 - DDR Laffer Curve result (stylized): - Net debt relief increases with haircut for haircut values below 20 percent. - Net debt relief declines beyond 20 percent haircut and becomes negative for values just below 40 percent. - In this stylized example, sovereign should not impose haircut above 20 percent to maximize net debt relief. ### Sensitivity to regulatory treatment and liability structure - Risk-weighting sovereign exposures (e.g., adopting 50 percent risk weight for sovereign securities) pivots the DDR Laffer Curve downward, increasing capital shortfalls and reducing net debt relief. - Basel Committee guidance: 50 percent risk weight for sovereigns rated between BBB+ and BBB-; 100 percent for BB+ to B-; 150 percent for below B-. A sovereign undergoing restructuring would be rated Selective Default (SD) and per this metric would require a 150 percent risk-weighting. - Liability-side factors: availability of “bail-in-able” deposits may reduce need for public intervention and shift the RLC upward. Wholesale funding profiles and rating downgrades may increase pressures and pivot the RLC downward. ### Safeguarding financial stability and recapitalizing institutions - DDRs reduce value of government debt exposures, causing capital losses unless absorbed by prior provisioning or accounting treatments. - Design choices matter: coupon reductions and maturity extensions generally have less direct balance-sheet impact than face-value haircuts; only around 18 percent of DDRs feature face-value reductions. - To estimate recapitalization needs precisely, conduct stress testing and asset quality reviews using detailed bank-by-bank data and assumptions on macro outlook and restructuring design. - Recognition of losses should be followed by a credible strategy to restore capital buffers; public recapitalizations carry downsides (moral hazard) and should be designed to minimize these. - Timing: public capital injections are typically booked as expenditure (fully or partially) depending on expected realistic return; subsequent adjustments when positions are liquidated. ### Empirical context on fiscal costs of bank recapitalizations - Laeven and Valencia (2020): median gross fiscal cost of a bank recapitalization in low and middle income countries is 10 percent of GDP; median net fiscal cost is 9.58 percent. - Practical implication: ex ante recoveries from capital injections using public funds are likely to be small if any. ### Summary table of Gross and Net Fiscal Cost of DDRs — country data (table excerpts) - Columns: Country / Start / End / Fiscal Costs, Gross 1/ / Fiscal Costs, Net 1/ / Increase in Public Debt - Cyprus 2/ — 2011 — 2015 3/ — 18.0 — 18.0 — 21.3 - El Salvador — 1989 — 1990 — ... — ... — -29.6 - Ghana — 1982 — 1983 — 6.0 — 6.0 — 15.5 - Mozambique — 1987 — 1991 3/ — ... — ... — 60.9 - Sierra Leone — 1990 — 1994 3/ — ... — ... — 62.9 - Notes associated with the table: - 1/ Fiscal costs refer to outlays directly related to the restructuring of the financial sector. - 2/ Numbers include the recapitalization of Cyprus Popular Bank, which took place following the Greek debt restructuring, thus overstating the fiscal intervention associated with Cyprus' own restructuring. - 3/ The duration of crisis is truncated at 5 years starting with the first crisis year. ### Policy implications and design considerations - Design DDRs to maximize net debt relief, recognizing that larger face-value haircuts can trigger large capital shortfalls and reduce or eliminate net fiscal gains. - Use stress testing and asset quality reviews to estimate recapitalization needs before announcing restructurings. - Consider design options (coupon reduction, maturity extension) that reduce direct impact on bank capital relative to face-value haircuts. - Factor in regulatory risk weights and liability structures (deposit base, bail-in capacity) when estimating fiscal costs and the DDR Laffer Curve position. - Include costs of safeguarding financial stability (financial stability funds, deposit insurance contributions) in net debt relief calculations. - Assume limited recoveries from public recapitalizations ex ante; plan for minimal recoveries in fiscal costing. --- ### Box 1. Jamaica Financial Sector Support Fund - Establishment and purpose: - The Financial Sector Support Fund (FSSF) was established by Jamaican authorities in January 2010 as a contingent measure to address possible negative impacts of Jamaica’s sovereign debt exchange (JDX) on the financial sector. - Purpose: provide funding to individual institutions that encounter specified problems, primarily liquidity, directly related to the debt exchange. - Size, funding, and governance: - Fund size: US$950 million (sourced from multilateral, mostly IMF, funds). - Managed by: Financial Regulatory Council (FRC). - FRC: an existing interagency body chaired by Bank of Jamaica (BOJ), charged with overseeing disbursement of funds under the FSSF. - Access criteria and incentives: - Eligibility: banks, securities dealers, and insurance companies that participated at a rate of at least 90 percent of their holdings of debt securities in the debt exchange. - Role as incentive: access restrictions meant the FSSF acted as an incentive to participate in the debt exchange. - Use, pricing, and repayment conditions: - Primary use: provide liquidity support in the event of external funding calls or pressure on deposits or assets under management attributable to the debt exchange. - Interest rate: to be set to avoid any fiscal costs. - Repayment term: any borrowing from the FSSF was to be repaid within 6 months or else a punitive rate would begin to apply. - Regulatory triggers: - Liquidity support above a threshold level (as a percent of the capital of the borrowing institution) would trigger increased regulatory intervention. - Banks and nonbank financial institutions would be intervened if a maximum level was breached. - Supervisory and operational conditionality: - Institutions accessing capital support: subject to enhanced monitoring by the BOJ or Financial Services Commission (FSC). - Reporting and viability requirements: - Deposit-taking institutions required to submit a five-year business plan by December 2010 substantiating viability and ability to comply with minimum capital requirements over a 2- to 3-year horizon. - Nonbank institutions required to submit a five-year business plan by December 2011 with similar objectives. - Government of Jamaica (GOJ) capitalization support conditions: - GOJ would place representatives on the entity’s board of directors. - Supervisory oversight would be more intensive, reporting requirements more demanding, and operations might be restricted depending on circumstances. - Outcomes during JDX episodes: - JDX timeline: launched on January 14, 2010; exchange closed on February 26 (2010). - Participation and results: - Participation rate: 99.2 percent on a stock of eligible debt of 65 percent of GDP. - No financial institution requested assistance from the FSSF in 2010. - The FSSF was reactivated as a safeguarding measure during the 2013 restructuring in Jamaica; in 2013 the FSSF remained untapped. - Related analytical considerations: - Central bank (CB) holdings of domestic sovereign debt require special care to ensure normal operations, including the conduct of monetary policy and the payments system. - Recapitalization needs of the CB following a restructuring that involves its holdings of sovereign debt should be assessed. - Key points: - Restructuring of CB holdings of government debt does not reduce overall public sector indebtedness in principle, but alternatives may affect burden sharing and could incentivize CBs to buy distressed debt prior to restructuring. - Restructuring of CB holdings may delay the transfer of seigniorage revenues, thus (temporarily) reducing future fiscal revenues. - In some jurisdictions carving out CB holdings of government securities may be impossible, making the negative impact of a DDR on CB capital inevitable. *Source: IMF Working Paper — Section 2. Gross and Net Fiscal Cost of DDRs* ### References ............................................................................................................. ### References ### Box - 1. Jamaica Financial Sector Support Fund .................................................................................................................... 13 ### Figures - 1a. Capital Shortfall and Net Debt Relief as a Function of Haircut............................................................................... 9 - 1b. Capital Shortfall and Net Debt Relief with Risk-Weighted Sovereign Exposure................................................ 10 - 2. Corner Solution—Only EDR Takes Place ................................................................................................................. 17 - 3. Interior Solution—Both EDR and DDR Take Place.................................................................................................. 17 ### Tables - 1. A Stylized Example of Capital Shortfall and Debt Relief Calculations..................................................................... 8 *https://www.imf.org/-/media/files/publications/wp/2023/english/wpiea2023024-print-pdf.pdf* ### 2. Gross and Net Fiscal Cost of DDRs ................................................................................... ### 2. Gross and Net Fiscal Cost of DDRs ### Key context and motivation - Domestic Debt Restructurings (DDRs) have increased in number and importance; domestic securities market volume is much larger than international sovereign debt markets. - In Emerging Markets and Developing Economies (EMDEs) the share of domestic debt in total debt rose from 31 to 46 percent from 2000 to 2020. - Success of a DDR should be measured by its ability to restore debt sustainability and market access, including restoration of credit to the economy (private and public sectors). - This chapter builds on IMF (2021) to operationalize concepts used in DDRs and to analyze net vs. gross relief and the DDR Laffer Curve. ### IMF decision framework (six steps) - Step 1: Estimate the debt relief target (DRT) necessary to restore public debt sustainability. - Step 2: Identify the perimeter of claims (i.e., instrument type) and categories of creditors holding “restructurable debt”. - Step 3: For each category of creditors, determine the potential contribution to DRT. - Step 4: Assess the economic costs associated with obtaining relief. - Step 5: Ensure the normal operation of the Central Bank (CB), including of the payments system, and assess the need for any immediate (or future) recapitalization(s) needs. - Step 6: Determine which claims to restructure in order to minimize overall costs while also achieving the DRT and supporting broader macroeconomic reforms. ### Gross vs. Net relief and the DDR Laffer Curve (conceptual) - Domestic restructurings impose direct costs on the local financial system, reducing the fiscal savings for the sovereign (negative externality). - Recapitalization and financial stability costs are likely increasing functions of the haircut; beyond a certain haircut the marginal net debt relief becomes negative. - The maximum beneficial haircut can be found iteratively by estimating recapitalization and financial stability costs associated with each haircut level. - Banks are emphasized given their size relative to NBFIs, but DDR design should also account for pension funds and insurance companies where relevant. ### Stylized example (Table 1) — bank balance-sheet impact by haircut - Banks hold government securities and loans; liabilities are unchanged; equity = assets − liabilities. - Pre-restructuring CAR of aggregate banking sector: 15 percent; regulatory requirement: 12 percent. - Assumption: loan impairment ratio is an increasing function of haircut. - Assumption used for public recapitalization adjustment in example: $400 (sum of liquidations/private replenishments), so fiscal recapitalization = (capital shortfall − $400) if shortfall > $400. - Summary of selected scenario calculations (values preserved exactly as presented): - Haircut 0 percent - Loan impairment 0 percent - Gov. bonds 2,000; Loans 8,000; Liabilities 9,000; Equity 1,000 - Memo: CAR 12.5% - Shortfall 0 - Haircut 10 percent - Loan impairment 1 percent - Gov. bonds 1,800; Loans 7,920; Liabilities 9,000; Equity 720 - Memo: CAR 9.1% - Shortfall 230 - Haircut 20 percent - Loan impairment 2 percent - Gov. bonds 1,600; Loans 7,840; Liabilities 9,000; Equity 440 - Memo: CAR 5.6% - Shortfall 501 - Haircut 30 percent - Loan impairment 4 percent - Gov. bonds 1,400; Loans 7,680; Liabilities 9,000; Equity 80 - Memo: CAR 1.0% - Shortfall 842 - Haircut 40 percent - Loan impairment 7 percent - Gov. bonds 1,200; Loans 7,440; Liabilities 9,000; Equity (360) - Memo: CAR -4.8% - Shortfall 1,253 - Haircut 50 percent - Loan impairment 11 percent - Gov. bonds 1,000; Loans 7,120; Liabilities 9,000; Equity (880) - Memo: CAR -12.4% - Shortfall 1,734 - Haircut 60 percent - Loan impairment 15 percent - Gov. bonds 800; Loans 6,800; Liabilities 9,000; Equity (1,400) - Memo: CAR -20.6% - Shortfall 2,216 - Summary finance-impact table excerpts (preserving values shown): - Haircut / Capital shortfall (below 12% CAR) / Public recap. cost (Shortfall above $400) / Gross debt relief (Haircut * Gov bonds) / Net debt relief (GDR − Public recap. cost) - 0 / 0.0 / 0.0 / 0.0 / 0.0 - 10 / 230.4 / 0.0 / 200 / 0.0 - 20 / 500.8 / 100.8 / 400 / 299.2 - 30 / 841.6 / 441.6 / 600 / 158.4 - 40 / 1,253.2 / 852.8 / 800 / -52.8 - 50 / 1,734.4 / 1,334.4 / 1,000 / -334.4 - 60 / 2,216.0 / 1,816.0 / 1,200 / -616.0 - DDR Laffer Curve result (stylized): - Net debt relief increases with haircut for haircut values below 20 percent. - Net debt relief declines beyond 20 percent haircut and becomes negative for values just below 40 percent. - In this stylized example, sovereign should not impose haircut above 20 percent to maximize net debt relief. ### Sensitivity to regulatory treatment and liability structure - Risk-weighting sovereign exposures (e.g., adopting 50 percent risk weight for sovereign securities) pivots the DDR Laffer Curve downward, increasing capital shortfalls and reducing net debt relief. - Basel Committee guidance: 50 percent risk weight for sovereigns rated between BBB+ and BBB-; 100 percent for BB+ to B-; 150 percent for below B-. A sovereign undergoing restructuring would be rated Selective Default (SD) and per this metric would require a 150 percent risk-weighting. - Liability-side factors: availability of “bail-in-able” deposits may reduce need for public intervention and shift the RLC upward. Wholesale funding profiles and rating downgrades may increase pressures and pivot the RLC downward. ### Safeguarding financial stability and recapitalizing institutions - DDRs reduce value of government debt exposures, causing capital losses unless absorbed by prior provisioning or accounting treatments. - Design choices matter: coupon reductions and maturity extensions generally have less direct balance-sheet impact than face-value haircuts; only around 18 percent of DDRs feature face-value reductions. - To estimate recapitalization needs precisely, conduct stress testing and asset quality reviews using detailed bank-by-bank data and assumptions on macro outlook and restructuring design. - Recognition of losses should be followed by a credible strategy to restore capital buffers; public recapitalizations carry downsides (moral hazard) and should be designed to minimize these. - Timing: public capital injections are typically booked as expenditure (fully or partially) depending on expected realistic return; subsequent adjustments when positions are liquidated. ### Empirical context on fiscal costs of bank recapitalizations - Laeven and Valencia (2020): median gross fiscal cost of a bank recapitalization in low and middle income countries is 10 percent of GDP; median net fiscal cost is 9.58 percent. - Practical implication: ex ante recoveries from capital injections using public funds are likely to be small if any. ### Summary table of Gross and Net Fiscal Cost of DDRs (Table 2) — country data preserved - Columns: Country / Start / End / Fiscal Costs, Gross 1/ / Fiscal Costs, Net 1/ / Increase in Public Debt - Cyprus 2/ — 2011 — 2015 3/ — 18.0 — 18.0 — 21.3 - El Salvador — 1989 — 1990 — ... — ... — -29.6 - Ghana — 1982 — 1983 — 6.0 — 6.0 — 15.5 - Mozambique — 1987 — 1991 3/ — ... — ... — 60.9 - Sierra Leone — 1990 — 1994 3/ — ... — ... — 62.9 - Notes associated with the table (preserving original phrasing): - 1/ Fiscal costs refer to outlays directly related to the restructuring of the financial sector. - 2/ Numbers include the recapitalization of Cyprus Popular Bank, which took place following the Greek debt restructuring, thus overstating the fiscal intervention associated with Cyprus' own restructuring. - 3/ The duration of crisis is truncated at 5 years starting with the first crisis year. ### Policy implications and design considerations (summarized) - Design DDRs to maximize net debt relief, recognizing that larger face-value haircuts can trigger large capital shortfalls and reduce or eliminate net fiscal gains. - Use stress testing and asset quality reviews to estimate recapitalization needs before announcing restructurings. - Consider design options (coupon reduction, maturity extension) that reduce direct impact on bank capital relative to face-value haircuts. - Factor in regulatory risk weights and liability structures (deposit base, bail-in capacity) when estimating fiscal costs and the DDR Laffer Curve position. - Include costs of safeguarding financial stability (financial stability funds, deposit insurance contributions) in net debt relief calculations. - Assume limited recoveries from public recapitalizations ex ante; plan for minimal recoveries in fiscal costing. *Source: IMF Working Paper — Section 2. Gross and Net Fiscal Cost of DDRs* ### Box 1. Jamaica Financial Sector Support Fund ### Box 1. Jamaica Financial Sector Support Fund ### Establishment and purpose - The Financial Sector Support Fund (FSSF) was established by Jamaican authorities in January 2010 as a contingent measure to address possible negative impacts of Jamaica’s sovereign debt exchange (JDX) on the financial sector. - Purpose: provide funding to individual institutions that encounter specified problems, primarily liquidity, directly related to the debt exchange. ### Size, funding, and governance - Fund size: US$950 million (sourced from multilateral, mostly IMF, funds). - Managed by: Financial Regulatory Council (FRC). - FRC: an existing interagency body chaired by Bank of Jamaica (BOJ), charged with overseeing disbursement of funds under the FSSF. ### Access criteria and incentives - Eligibility: banks, securities dealers, and insurance companies that participated at a rate of at least 90 percent of their holdings of debt securities in the debt exchange. - Role as incentive: access restrictions meant the FSSF acted as an incentive to participate in the debt exchange. ### Use, pricing, and repayment conditions - Primary use: provide liquidity support in the event of external funding calls or pressure on deposits or assets under management attributable to the debt exchange. - Interest rate: to be set to avoid any fiscal costs. - Repayment term: any borrowing from the FSSF was to be repaid within 6 months or else a punitive rate would begin to apply. - Regulatory triggers: - Liquidity support above a threshold level (as a percent of the capital of the borrowing institution) would trigger increased regulatory intervention. - Banks and nonbank financial institutions would be intervened if a maximum level was breached. ### Supervisory and operational conditionality - Institutions accessing capital support: subject to enhanced monitoring by the BOJ or Financial Services Commission (FSC). - Reporting and viability requirements: - Deposit-taking institutions required to submit a five-year business plan by December 2010 substantiating viability and ability to comply with minimum capital requirements over a 2- to 3-year horizon. - Nonbank institutions required to submit a five-year business plan by December 2011 with similar objectives. - Government of Jamaica (GOJ) capitalization support conditions: - GOJ would place representatives on the entity’s board of directors. - Supervisory oversight would be more intensive, reporting requirements more demanding, and operations might be restricted depending on circumstances. ### Outcomes during JDX episodes - JDX timeline: launched on January 14, 2010; exchange closed on February 26 (2010). - Participation and results: - Participation rate: 99.2 percent on a stock of eligible debt of 65 percent of GDP. - No financial institution requested assistance from the FSSF in 2010. - The FSSF was reactivated as a safeguarding measure during the 2013 restructuring in Jamaica; in 2013 the FSSF remained untapped. ### Related analytical considerations (as highlighted in IMF (2021)) - Central bank (CB) holdings of domestic sovereign debt require special care to ensure normal operations, including the conduct of monetary policy and the payments system. - Recapitalization needs of the CB following a restructuring that involves its holdings of sovereign debt should be assessed. - Key points: - Restructuring of CB holdings of government debt does not reduce overall public sector indebtedness in principle, but alternatives may affect burden sharing and could incentivize CBs to buy distressed debt prior to restructuring. - Restructuring of CB holdings may delay the transfer of seigniorage revenues, thus (temporarily) reducing future fiscal revenues. - In some jurisdictions carving out CB holdings of government securities may be impossible, making the negative impact of a DDR on CB capital inevitable. *Source: Box 1. Jamaica Financial Sector Support Fund — wpiea2023024-print-pdf* ### References ### References ### Sovereign debt restructuring and legal/market issues - Anthony, Myrvin, Gregory Impavido, and Bert van Selm, 2020, “Barbados’ 2018–19 Sovereign Debt Restructuring—A Sea Change?” IMF Working Paper 20/34. - Asonuma, Tamon, Dirk Niepelt, and Romain Ranciere, 2022. “Sovereign Bond Prices, Haircuts and Maturity,” forthcoming in Journal of International Economics. - Buchheit, Lee and Mitu Gulati, 2022. “Enforcing Comparable Treatment in Sovereign Debt Workouts,” mimeo. - Buchheit, Lee, Guillaume Chabert, Chanda DeLong, and Jeromin Zettelmeyer, 2019. “How to Restructure Sovereign Debt: Lessons from Four Decades,” in Ali Abbas, Alex Pienkowski, and Kenneth Rogoff, Sovereign Debt: A Guide for Economists and Practitioners (Oxford: Oxford University Press, 2019). - Erce, Aitor, Enrico Mallucci, and Mattia Picarelli, 2022. “A Journey in the History of Sovereign Defaults on Domestic-Law Public Debt,” Board of Governors of the Federal Reserve System International Finance Discussion Paper No. 1338, March. - Grund, Sebastian, 2023. “Sovereign Debt Restructuring and the Law: The Holdout Creditor Problem in Argentina and Greece,” Forthcoming, Routledge. - Grund, Sebastian and Filip Grle, 2016. “The European Central Bank's Public Sector Purchase Programme (PSPP), the Prohibition of Monetary Financing and Sovereign Debt Restructuring Scenarios,” European Law Review, November. - International Monetary Fund, 2013. “Sovereign Debt Restructuring - Recent Developments and Implications for the Fund's Legal and Policy Framework,” IMF Policy Paper, April. - Rivetti, Diego, 2022. “Achieving Comparability of Treatment under the G20’s Common Framework,” Equitable Growth, Finance, and Institutions Notes, The World Bank. - Sturzenegger, Federico and Jeromin Zettelmeyer, 2005. “Haircuts: Estimating Investor Losses in Sovereign Debt Restructurings, 1998–2005,” IMF Working Paper 05/137, Washington, DC. - Zettelmeyer, Jeromin, Christoph Trebesch, and Mitu Gulati, 2013. "The Greek Debt Restructuring: An Autopsy," Economic Policy 28(75), 513-63. ### Country and case studies of restructurings and crises - Asonuma, Tamon, Michael G. Papaioannou, and Taka Tsuda, 2021. “Domestic Sovereign Debt Restructuring, Banking Crisis, and Financial Stability Policies in Cyprus During 2012–13,” Multinational Finance Journal 25, No. 3/4, pp. 163-86. - Grigorian, David A., Trevor Alleyne, and Alejandro Guerson, 2012. “Jamaica Debt Exchange,” IMF Working Paper 12/244, Washington, DC. - Anthony, Myrvin, Gregory Impavido, and Bert van Selm, 2020, “Barbados’ 2018–19 Sovereign Debt Restructuring—A Sea Change?” IMF Working Paper 20/34. - Zettelmeyer, Jeromin, Christoph Trebesch, and Mitu Gulati, 2013. "The Greek Debt Restructuring: An Autopsy," Economic Policy 28(75), 513-63. ### Sovereign-bank nexus, banking crises, and financial stability - Dell’Ariccia, Giovanni, Caio Ferreira, Nigel Jenkinson, Luc Laeven, Alberto Martin, Camelia Minoiu, and Alex Popov, 2018a. “Managing the Sovereign-Bank Nexus,” IMF Staff Discussion Note 18/16, International Monetary Fund, Washington, DC. - Dell’Ariccia, Giovanni, Maria Soledad Martinez Peria, Deniz Igan, Elsie Addo Awadzi, Marc Dobler, and Damiano Sandri, 2018b. “Trade-offs in Bank Resolution.” IMF Staff Discussion Note 18/02, International Monetary Fund, Washington, DC. - Dobler, Marc, Marina Moretti, and Alvaro Piris, 2020. “Managing Systemic Banking Crises: New Lessons and Lessons Relearned,” Monetary and Capital markets Department, IMF, Washington, DC. - Homar, Timotej and Sweder J. G. van Wijnbergen, 2017. “Bank Recapitalization and Economic Recovery After Financial Crises,” Journal of Financial Intermediation 32, October, pp. 16-28. - Laeven, Luc, and Fabian Valencia, 2020. “Systemic Banking Crises Database II,” IMF Economic Review 68, pp. 307–61, Washington, DC. - Grigorian, David A., and Vlad Manole, 2017. “Sovereign Risk and Deposit Dynamics: Evidence from Europe.” Applied Economics 49 (29): pp. 2851–60. ### Market infrastructure, statistics, and methodologies - Bank for International Settlements, 2021. “Central and Government Debt Securities Markets.” Available via: https://www.bis.org/statistics/c4.pdf - Basel Committee on Banking Supervision, 2017. “The Regulatory Treatment of Sovereign Exposures,” Discussion Paper, December. - International Monetary Fund, 2014. “Government Finance Statistics Manual,” Washington, DC. - Cihak, Martin, 2007. “Introduction to Applied Stress Testing,” IMF Working Paper 2007/059, March. - Kozack, Julie, 2005. “Considerations in the Choice of the Appropriate Discount Rate for Evaluating Sovereign Debt Restructurings,” IMF Policy Discussion Paper 05/9, Washington, DC. - Grigorian, David A., 2019. “Nonresident Capital Flows and Volatility: Evidence from Malaysia’s Local Currency Bond Market,” IMF Working Paper 19/23, Washington, DC. ### IMF policy and synthesis documents - International Monetary Fund, 2021. “Issues in Restructuring Sovereign Domestic Debt,” IMF Policy Paper, December. - International Monetary Fund, 2013. “Sovereign Debt Restructuring - Recent Developments and Implications for the Fund's Legal and Policy Framework,” IMF Policy Paper, April. *References list from wpiea2023024-print-pdf - References* --- _Source: https://www.imf.org/-/media/files/publications/wp/2023/english/wpiea2023024-print-pdf.pdf_