Improving Sovereign Debt Restructurings

Abstract

The wave of sovereign defaults in the early 1980s and the string of debt crises in subsequent decades have fostered proposals involving policy interventions in sovereign debt restructurings. The global financial crisis and the recent global pandemic have further reignited this discussion among academics and policymakers. A key question about these policy proposals for debt restructurings that has proved hard to handle is how they influence the behavior of creditors and debtors. We address this challenge by evaluating policy

Keywords: Crises, GDP-indexed Debt, Distribution of Creditor Losses, Default, Sovereign Debt, Maturity, Restructuring, Country Risk, International Monetary Fund

JEL Classification: F34, F41, G15