IDEAS home Printed from https://ideas.repec.org/p/iie/wpaper/wp19-8.html
   My bibliography  Save this paper

How to Restructure Sovereign Debt: Lessons from Four Decades

Author

Listed:
  • Lee Buchheit

    (formerly at Cleary Gottlieb Steen & Hamilton)

  • Chanda DeLong

    (International Monetary Fund)

  • Guillaume Chabert

    (French Ministry for the Economy and Finance; Paris Club)

  • Jeromin Zettlemeyer

    (Peterson Institute for International Economics)

Abstract

This paper attempts to provide a playbook for the sovereign debt restructuring process, drawing on the experience with sovereign debt restructuring since the 1980s. It begins with a discussion of the participating actors and their interests. It then describes the considerations that must be weighed in designing, negotiating, and concluding a debt restructuring, in light of two problems: asymmetric information between the debtor and the creditors, and creditor coordination problems, which can lead to free riding (the “holdout” problem). The paper focuses on how these problems, which can lead to inefficiently negotiated outcomes, can be managed and minimized in practice.

Suggested Citation

  • Lee Buchheit & Chanda DeLong & Guillaume Chabert & Jeromin Zettlemeyer, 2019. "How to Restructure Sovereign Debt: Lessons from Four Decades," Working Paper Series WP19-8, Peterson Institute for International Economics.
    • Handle: RePEc:iie:wpaper:wp19-8
    as

    Download full text from publisher

    File URL: https://www.piie.com/publications/working-papers/how-restructure-sovereign-debt-lessons-four-decades
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Álvaro Leandro & Jeromin Zettelmeyer, 2019. "Creating a Euro area safe asset without mutualizing risk (much)," Capital Markets Law Journal, Oxford University Press, vol. 14(4), pages 488-517.
    2. Elard, Ilaf, 2020. "Three-player sovereign debt negotiations," International Economics, Elsevier, vol. 164(C), pages 217-240.
    3. Howard Haughton & Jodie Keane, 2021. "Alleviating debt distress and advancing the sustainable development goals," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(3), pages 528-536, May.
    4. Alberto Isgut, 2021. "Addressing sovereign debt challenges in the era of COVID-19 and beyond: the role of the United Nations," Asia-Pacific Sustainable Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 28(2), pages 149-192, December.
    5. Andrea Papadia & Claudio Schioppa, 2020. "Foreign Debt, Capital Controls, and Secondary Markets: Theory and Evidence from Nazi Germany," Working Papers ECARES 2020-36, ULB -- Universite Libre de Bruxelles.
    6. Thomas MELONIO & Marine BERTUZZI & Alisée PORNET & Laëtitia TREMEL, 2019. "Vers de « Nouvelles routes de la soie » durables ?," Working Paper 4004c1b4-7b36-46ae-8e8e-4, Agence française de développement.
    7. Schioppa, Claudio A. & Papadia, Andrea, 2015. "Foreign Debt and Secondary Markets: The Case of Interwar Germany," MPRA Paper 102863, University Library of Munich, Germany, revised 2016.

    More about this item

    Keywords

    Sovereign debt; financial crises; debt restructuring; debt defaults; Paris Club;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iie:wpaper:wp19-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peterson Institute webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/iieeeus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.