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Sovereign debt restructurings and the IMF: implications for future official interventions


  • Aitor Erce


This paper studies the role played by the IMF during sovereign debt restructurings and extracts lessons for future official interventions. To do so, I compare twelve recent debt restructurings. I begin by detailing the main features (“restructuring strategies”) of each episode. I then analyze the involvement of the Fund and relate it to the above-cited strategies. Despite the wide heterogeneity both in restructuring strategies and in the scope of IMF’s involvement, the Fund exerted a substantial influence. This influence came, not only through the provision of official finance and by setting an adjustment path through conditionality, but also by providing independent information and influencing countries’ decisions to restructure by providing incentives both to creditors and debtors. My conclusion is that the flexibility that has characterized the role of the IMF so far might have exacerbated uncertainty and induced undesirable strategies from debtors and creditors alike. Thus, the international community could benefit from granting the IMF a more standardized operational role, reducing gambling for resurrection strategies and fostering fairness. Along these lines, I present ideas for reframing the IMF’s engagement in sovereign debt restructurings.

Suggested Citation

  • Aitor Erce, 2013. "Sovereign debt restructurings and the IMF: implications for future official interventions," Globalization and Monetary Policy Institute Working Paper 143, Federal Reserve Bank of Dallas.
  • Handle: RePEc:fip:feddgw:143

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    References listed on IDEAS

    1. Niko Gobbin & Bruno Merlevede, 2000. "The Russian Crisis: A Debt Perspective," Post-Communist Economies, Taylor & Francis Journals, vol. 12(2), pages 141-163.
    2. David Benjamin, 2008. "Recovery Before Redemption," 2008 Meeting Papers 531, Society for Economic Dynamics.
    3. Federico Sturzenegger & Jeromin Zettelmeyer, 2007. "Creditors' Losses Versus Debt Relief: Results from a Decade of Sovereign Debt Crises," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 343-351, 04-05.
    4. Javier Díaz-Cassou & Aitor Erce-Domínguez & Juan J. Vázquez-Zamora, 2008. "Recent episodes of sovereign debt restructurings. A case-study approach," Occasional Papers 0804, Banco de España;Occasional Papers Homepage.
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    Cited by:

    1. Julian Schumacher & Christoph Trebesch & Henrik Enderlein, 2015. "What Explains Sovereign Debt Litigation?," CESifo Working Paper Series 5319, CESifo Group Munich.
    2. Aitor Erce, 2013. "Sovereign debt crises: could an international court minimize them?," Globalization and Monetary Policy Institute Working Paper 142, Federal Reserve Bank of Dallas.

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