"Burden sharing" in sovereign debt reduction
We examine a concerted debt reduction deal between a sovereign debtor, a private creditor, and an official creditor, who insures the deposits of the commercial bank. Our results show that a weakening of the financial position of the commercial bank reduces the contribution of the commercial bank and increases that of the official creditor, without affecting the net terms faced by the debtor. This result is robust to changes in seniority. Moreover, leaving both creditor values unchanged requires that commercial banks retire debt at "unfairly" high prices, while official creditors make a net contribution.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Demirguc-Kunt, Asli & Huizinga, Harry, 1991.
"Official credits to developing countries : implicit transfers to the banks,"
Policy Research Working Paper Series
592, The World Bank.
- Demirguc-Kunt, Asli & Huizinga, Harry, 1993. "Official Credits to Developing Countries: Implicit Transfers to the Banks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(3), pages 430-44, August.
- Huizinga, H.P. & Demirguc-Kunt, A., 1993. "Official credits to developing countries : Implicit transfers to the banks," Other publications TiSEM 3e86ba61-dde4-4c9c-bd2c-e, Tilburg University, School of Economics and Management.
- Diwan, Ishac & Spiegel, Mark M., 1991.
"Are buybacks back? Menu-driven debt-reduction schemes with heterogenous creditors,"
Policy Research Working Paper Series
675, The World Bank.
- Diwan, Ishac & Spiegel, Mark M., 1994. "Are buybacks back? Menu-driven debt reduction schemes with heterogeneous creditors," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 279-293, October.
- Jeremy Bulow & Kenneth Rogoff, 1989.
"Sovereign Debt Repurchases: No Cure for Overhang,"
NBER Working Papers
2850, National Bureau of Economic Research, Inc.
- Michael Dooley & Richard D. Haas & Steven Symansky, 1993.
"A Note on Burden Sharing among Creditors,"
IMF Staff Papers,
Palgrave Macmillan, vol. 40(1), pages 226-232, March.
- Ishac Diwan & Dani Rodrik, 1992. "Debt Reduction, Adjustment Lending, and Burden Sharing," NBER Working Papers 4007, National Bureau of Economic Research, Inc.
- Claessens, Stijn & Diwan, Ishac & Fernandez-Arias, Eduardo, 1992. "Recent experience with commercial bank debt reduction," Policy Research Working Paper Series 995, The World Bank.
- Demirguc-Kunt, Ash & Diwan, Ishac & Spiegel, Mark M., 1997.
"Heterogeneity in bank valuation of LDC debt: Evidence from the 1988 Brazilian debt-reduction program,"
Journal of Monetary Economics,
Elsevier, vol. 39(3), pages 535-550, August.
- Demirguc-Kunt, A. & Diwan, I. & Spiegel, M.M., 1993. "Heterogeneity in Bank Valuation of LCD Debt: Evidence from the 1988 Brazilian Debt-Reduction Program," Working Papers 93-33, C.V. Starr Center for Applied Economics, New York University.
- Krugman, Paul, 1988.
"Financing vs. forgiving a debt overhang,"
Journal of Development Economics,
Elsevier, vol. 29(3), pages 253-268, November.
- Jeremy Bulow & Kenneth Rogoff & Afonso S. Bevilaqua, 1992. "Official Creditor Seniority and Burden-Sharing in the Former Soviet Bloc," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 195-234.
- Demirguc-Kunt, Asli & Fernandez-Arias, Eduardo, 1992. "Burden-sharing among official and private creditors," Policy Research Working Paper Series 943, The World Bank.
- Froot, Kenneth A, 1989.
"Buybacks, Exit Bonds, and the Optimality of Debt and Liquidity Relief,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 49-70, February.
- Kenneth A. Froot, 1988. "Buybacks, Exit Bonds, and the Optimality of Debt and Liquidity Relief," NBER Working Papers 2675, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:50:y:1996:i:2:p:337-351. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.