Beyond Balancing the Interests of Creditors and Developing States
ASIL Proceedings, 2003
9 Pages Posted: 22 Feb 2006
Date Written: 2003
The traditional view of sovereign debt as a relationship between a developing country government and and its foreign private creditors is increasingly out of date. Financial institutions and individuals inside the borrowing countries are are becoming more and more important as creditors to their governments. At the same time, as countries remove restrictions on cross-border capital flows, foreign creditors are participating more actively in domestic law, local-currency debt markets. These developments imply fundamental changes in lending decisions and, where the loan goes bad, in the sovereign debt workout process.
Keywords: sovereign debt, international finance, emerging markets, domestic and external debt, development
JEL Classification: F34, F36, K33, K29
Suggested Citation: Suggested Citation