Orderly Sovereign Debt Restructuring : Missing in Action! (And Likely To Remain So)

An orderly sovereign debt restructuring should place the debtor nation's public debt on a sustainable trajectory while minimizing procrastination and contagion. However, the experiences with the debt crisis of the 1980s, Russia 1998, Argentina 2001, and Greece 2010 indicate that orderly debt re...

Full description

Bibliographic Details
Main Authors:	Canuto, Otaviano, Pinto, Brian, Prasad, Mona
Format:	Journal Article
Language:	en_US
Published:	Oxford University Press on behalf of the World Bank 2015
Subjects:	bailout bond central bank debt crisis debtor emerging market emerging market countries international bank liquidity moral hazard political economy private creditor public debt solvency sovereign debt sovereign debt restructuring
Online Access:	http://hdl.handle.net/10986/22566

id	okr-10986-22566
recordtype	oai_dc
spelling	okr-10986-225662021-04-23T14:04:09Z Orderly Sovereign Debt Restructuring : Missing in Action! (And Likely To Remain So) Canuto, Otaviano Pinto, Brian Prasad, Mona bailout bond central bank debt crisis debtor emerging market emerging market countries emerging market international bank liquidity moral hazard political economy private creditor public debt solvency sovereign debt sovereign debt restructuring An orderly sovereign debt restructuring should place the debtor nation's public debt on a sustainable trajectory while minimizing procrastination and contagion. However, the experiences with the debt crisis of the 1980s, Russia 1998, Argentina 2001, and Greece 2010 indicate that orderly debt restructurings remain elusive, even with high-powered official intervention. When solvency problems are present, the chances of success increase if official money is lent at the risk-free rate, reflecting its low risk, and if private creditors receive an upfront haircut. The paper examines the obstacles, which include moral hazard, difficulty in distinguishing between solvency and liquidity crises, and the “political economy” resistance to upfront haircuts. Orderly sovereign debt restructurings are likely to remain elusive notwithstanding recent evidence that the official mindset may be changing. 2015-08-28T20:44:34Z 2015-08-28T20:44:34Z 2014-01-24 Journal Article World Bank Research Observer 1564-6971 http://hdl.handle.net/10986/22566 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ World Bank Oxford University Press on behalf of the World Bank Publications & Research Publications & Research :: Journal Article Latin America Argentina Greece Russian Federation
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	bailout bond central bank debt crisis debtor emerging market emerging market countries emerging market international bank liquidity moral hazard political economy private creditor public debt solvency sovereign debt sovereign debt restructuring
spellingShingle	bailout bond central bank debt crisis debtor emerging market emerging market countries emerging market international bank liquidity moral hazard political economy private creditor public debt solvency sovereign debt sovereign debt restructuring Canuto, Otaviano Pinto, Brian Prasad, Mona Orderly Sovereign Debt Restructuring : Missing in Action! (And Likely To Remain So)
geographic_facet	Latin America Argentina Greece Russian Federation
description	An orderly sovereign debt restructuring should place the debtor nation's public debt on a sustainable trajectory while minimizing procrastination and contagion. However, the experiences with the debt crisis of the 1980s, Russia 1998, Argentina 2001, and Greece 2010 indicate that orderly debt restructurings remain elusive, even with high-powered official intervention. When solvency problems are present, the chances of success increase if official money is lent at the risk-free rate, reflecting its low risk, and if private creditors receive an upfront haircut. The paper examines the obstacles, which include moral hazard, difficulty in distinguishing between solvency and liquidity crises, and the “political economy” resistance to upfront haircuts. Orderly sovereign debt restructurings are likely to remain elusive notwithstanding recent evidence that the official mindset may be changing.
format	Journal Article
author	Canuto, Otaviano Pinto, Brian Prasad, Mona
author_facet	Canuto, Otaviano Pinto, Brian Prasad, Mona
author_sort	Canuto, Otaviano
title	Orderly Sovereign Debt Restructuring : Missing in Action! (And Likely To Remain So)
title_short	Orderly Sovereign Debt Restructuring : Missing in Action! (And Likely To Remain So)
title_full	Orderly Sovereign Debt Restructuring : Missing in Action! (And Likely To Remain So)
title_fullStr	Orderly Sovereign Debt Restructuring : Missing in Action! (And Likely To Remain So)
title_full_unstemmed	Orderly Sovereign Debt Restructuring : Missing in Action! (And Likely To Remain So)
title_sort	orderly sovereign debt restructuring : missing in action! (and likely to remain so)
publisher	Oxford University Press on behalf of the World Bank
publishDate	2015
url	http://hdl.handle.net/10986/22566
_version_	1764451434795892736

Orderly Sovereign Debt Restructuring : Missing in Action! (And Likely To Remain So)

Similar Items