Bank Insolvency and Sovereign Insolvency
Rosa Maria Lastra, CROSS-BORDER BANK INSOLVENCY, Chapter 13, Oxford University Press, May 2011
28 Pages Posted: 1 Jan 2011
The financial crisis that started in 2008 is spreading from the private to the public sector. The migration from private to public balance sheets, and vice versa, is a familiar story in the history of international finance. The most prominent channel linking sovereign and private sector balance sheets is the insolvency of banks. This chapter reviews the link between sovereign and private debt crises, with reference to historical episodes. It addresses, in particular, the question when a government is liable internationally for the debts of its banks.
Keywords: sovereign default, bank insolvency, migration of debt, banking crisis
JEL Classification: F34, F33, G10
Suggested Citation: Suggested Citation