Is Aggregation a Problem for Sovereign Debt Restructuring?
AbstractReform of the mechanisms and procedures through which problems of sovereign debt sustainability are resolved is at the centre of the effort to make the international financial system less crisis prone. The purported difficulty of coordinating creditors holding distinct bond issues provides one basis for choosing among the reform proposals currently on the table. We assess the significance of this difficulty (â€˜the aggregation problemâ€™) using evidence on the pricing of international bonds. Our evidence suggests that investors do perceive that aggregation has costs. Plausibly, they worry most about difficulties of information sharing and coordination across issues when the debt in question is an obligation of a country with a significant perceived probability of having to restructure.
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 93 (2003)
Issue (Month): 2 (May)
Other versions of this item:
- Eichengreen, Barry & Mody, Ashoka, 2003. "Is Aggregation a Problem for Sovereign Debt Restructuring?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3771, C.E.P.R. Discussion Papers.
- F00 - International Economics - - General - - - General
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