The Corporation of Foreign Bondholders

Author/Editor:

Paolo Mauro ; Yishay Yafeh

Publication Date:

May 1, 2003

Electronic Access:

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Disclaimer: 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:

This paper analyzes the Corporation of Foreign Bondholders (CFB), an association of British investors holding bonds issued by foreign governments. The CFB played a key role during the heyday of international bond finance, 1870-1913, and in the aftermath of the defaults of the 1930s. It fostered coordination among creditors, especially in cases of default, arranging successfully for many important debt restructurings, though failing persistently in a few cases. While a revamped creditor association might once again help facilitate creditor coordination, the relative appeal of defection over coordination is greater today than it was in the past. The CFB may have had an easier time than any comparable body would have today.

Series:

Working Paper No. 2003/107

Subject:

Bonds Collective action clauses Emerging and frontier financial markets Financial institutions Financial markets Loans Sovereign bonds

English

Publication Date:

May 1, 2003

ISBN/ISSN:

9781451853001/1018-5941

Stock No:

WPIEA1072003

Pages:

31

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