Sovereign Liquidity Crisis: The Strategic Case for a Payments Standstill
Is sovereign borrowing so different from corporate debt that there is no need for bankruptcy- style procedures to protect debtors? With the waiver of immunity, sovereign debtors who already face severe disruption from short-term creditors grabbing their currency reserves are also exposed to litigious creditors trying to seize what assets they can in a 'race of the vultures'. Shielding sovereign debtors from inter-creditor conflict by authorised standstills on payments doubt-less runs some risk of debtor's moral hazard. But the lack of an orderly procedure for resolving sovereign liquidity crises means that the IMF is de facto forced to bail out countries in trouble. This leads to both debtor and creditor moral hazard, as investors lend without monitoring, knowing that their investments are essentially guaranteed. The strategic case for legalising standstills is to rescue the international financial system from this 'time consistent' trap.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
| Length: | |
| Date of creation: | Jun 1999 |
| Handle: | RePEc:wck:wckewp:35/99 |
| Contact details of provider: | Postal: Centre for the Study of Globalisation and Regionalisation (CSGR) University of Warwick Coventry CV4 7AL, U.K. Phone: +44 (0) 1203 572 533 Fax: +44 (0) 1203 572 548 Web page: http://www.warwick.ac.uk/fac/soc/CSGR/ Email: More information through EDIRC
|
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.:
- Leonardo Bartolini & Avinash Dixit, 1991.
"Market Valuation of Illiquid Debt and Implications for Conflicts among Creditors,"
IMF Staff Papers,
Palgrave Macmillan, vol. 38(4), pages 828-849, December.
- Leonardo Bartolini & Avinash K Dixit, 1990. "Market Valuation of Illiquid Debt and Implications for Conflicts Among Creditors," IMF Working Papers 90/88, International Monetary Fund.
- William R. Cline, 1995. "International Debt Reexamined," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 46, November.
- Amar Bhattacharya & Marcus Miller, 1999. "Coping with Crises: Is There a "Silver Bullet"?," CSGR Hot Topics: Research on Current Issues 06, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
- Stanley Fischer, 1999. "On the Need for an International Lender of Last Resort," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 85-104, Fall.
- Jeremy Bulow & Kenneth Rogoff, 1991. "Sovereign Debt Repurchases: No Cure for Overhang," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1219-1235.
- Jeremy Bulow & Kenneth Rogoff, 1989. "Sovereign Debt Repurchases: No Cure for Overhang," NBER Working Papers 2850, National Bureau of Economic Research, Inc.
- Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, July.
- Buiter, Willem H & Sibert, Anne C, 1999. "UDROP: A Contribution to the New International Financial Architecture," International Finance, Wiley Blackwell, vol. 2(2), pages 227-247, July.
- Buiter, Willem H. & Sibert, Anne, 1999. "UDROP: A Small Contribution to the New International Financial Architecture," CEPR Discussion Papers 2138, C.E.P.R. Discussion Papers.
- Cohen, Daniel, 1993. "A valuation formula for LDC debt," Journal of International Economics, Elsevier, vol. 34(1-2), pages 167-180, February.
- Cohen, Daniel, 1990. "A Valuation Formula for LDC Debt," CEPR Discussion Papers 460, C.E.P.R. Discussion Papers.
- Cohen, Daniel, 1991. "A valuation formula for LDC debt," Policy Research Working Paper Series 763, The World Bank.
- Jeremy Bulow & Kenneth Rogoff, 1988. "The Buyback Boondoggle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 675-704.
- Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, July.
- Maurice Obstfeld, 1994. "The Logic of Currency Crises," NBER Working Papers 4640, National Bureau of Economic Research, Inc.
- Jonathan Eaton & Mark Gersovitz, 1981. "Debt with Potential Repudiation: Theoretical and Empirical Analysis," Review of Economic Studies, Oxford University Press, vol. 48(2), pages 289-309.
- Marcus Miller & Lei Zhang, 1998. "Macroeconomic Policy Options for Managing Capital Flows," CSGR Hot Topics: Research on Current Issues 01, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
- Barry J. Eichengreen, 1999. "Toward a New International Financial Architecture: A Practical Post-Asia Agenda," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 51, November.
- Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
- Lambrecht, Bart & Perraudin, William, 1996. "Creditor races and contingent claims," European Economic Review, Elsevier, vol. 40(3-5), pages 897-907, April. Full references (including those not matched with items on IDEAS)
This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.
When requesting a correction, please mention this item's handle: RePEc:wck:wckewp:35/99. 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: (Thomas Krichel)
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.