Structuring and Restructuring Sovereign Debt: The Role of a Bankruptcy Regime
August 1, 2007
Download PDF
More Formats on IMF eLibrary
Order a Print CopyDisclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary
In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure ex post. We show however, that competition for repayment among lenders may result in a sovereign debt that is excessively difficult to restructure in equilibrium. This inefficiency may be alleviated by a suitably designed bankruptcy regime that facilitates debt restructuring.
Subject: Debt default, Debt restructuring, Financial crises, Public debt, Sovereign debt restructuring
Keywords: debt structure, short-term debt, WP
Pages:
27
Volume:
2007
DOI:
Issue:
192
Series:
Working Paper No. 2007/192
Stock No:
WPIEA2007192
ISBN:
9781451867565
ISSN:
1018-5941
