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Structuring and Restructuring Sovereign Debt: The Role of Seniority / Patrick Bolton, Olivier Jeanne.
- Format:
- Book
- Author/Creator:
- Bolton, Patrick.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w11071.
- NBER working paper series no. w11071
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Structuring and Restructuring Sovereign Debt
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2005.
- Summary:
- In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure. We show within a simple model how competition for repayment between lenders may result in sovereign debt that is excessively difficult to restructure in equilibrium. Alleviating this inefficiency requires a sovereign debt restructuring mechanism that fulfills some of the functions of corporate bankruptcy regimes, in particular the enforcement of seniority and subordination clauses in debt contracts.
- Notes:
- Print version record
- January 2005.
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