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Sovereign Bailouts and Senior Loans / Christophe Chamley, Brian Pinto.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications")- Format:
- Book
- Author/Creator:
- Chamley, Christophe, author.
- Pinto, Brian, author.
- Series:
- Policy research working papers ; 6181.
- Policy research working papers ; 6181
- Language:
- English
- Subjects (All):
- International economic relations--History--20th century.
- Physical Description:
- 1 online resource (30 pages).
- Place of Publication:
- Washington, DC : World Bank, 2012.
- Summary:
- Institutional lending in crisis is evaluated from a theoretical point of view. First, the share of senior loans in new loans is irrelevant under a given probability distribution of the country's resources. Second, seniority may partially alleviate the inefficiency of debt contracts when the distribution of resources is endogenous to the country's physical investment and effort towards success. Third, with multiple lending rate equilibria, institutional lending may induce a switch to a lower private loan rate if it can be done in a sufficiently large amount. Fourth, conditions are analyzed under which debt forgiveness is efficient under a financial shock.
- Notes:
- Description based on publisher supplied metadata and other sources.
- Includes bibliographical references and index.
- Publisher Number:
- 10.1596/1813-9450-6181
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