[PDF] Rational Liquidity Crises In The Sovereign Debt Market eBook

Author : Ms.Enrica Detragiache
Publisher : International Monetary Fund
Page : 32 pages
File Size : 42,33 MB
Release : 1996-04-01
Category : Business & Economics
ISBN : 1451845642

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This paper studies under what circumstances creditworthy sovereign borrowers may be denied liquidity by rational creditors. It is shown that, when the creditor side of the market consists of many small investors there may be multiple rational expectations equilibria. In one equilibrium, creditors’ pessimistic expectations about the borrower’s creditworthiness become self-fulfilling, and the borrower experiences a liquidity crisis. Multiple equilibria can be avoided by marketing the loan appropriately or by developing a reputation for following good policies. Liquidity problems can also arise because of the temporary disruption of international bond markets due to events unrelated to the borrower’s circumstances. Policies responses are discussed.

Author : Mr.Stijn Claessens
Publisher : International Monetary Fund
Page : 66 pages
File Size : 23,31 MB
Release : 2013-01-30
Category : Business & Economics
ISBN : 1475561008

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This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.

Author : Bachar Fakhry & Christian R. Richter
Publisher : KSP Books
Page : 135 pages
File Size : 37,16 MB
Release : 2020-01-01
Category : Business & Economics
ISBN : 6057736923

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The Sovereign Debt Market is an essential section of the global financial market. In essence it is the main route for governments to cover any fiscal deficit in their budget. As of end of 2018, the market was US$188 trillion according to the IMF report on 17 December 2019. The market was long regarded as a safe haven for investors, especially the US treasuries and German Bunds. However in recent years the market has suffered several crises leaving investors questioning their high quality ratings. In this book we look at the efficiency and stability of the sovereign debt markets at the heart of the crises: US, German, Greek, Italian Portuguese and Spanish sovereign debt markets. We ask ourselves are these markets moving according to the Efficient Market Hypothesis or Behavioural Finance Theory?

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 45 pages
File Size : 19,42 MB
Release : 2011-04-18
Category : Business & Economics
ISBN : 1498338941

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The crisis highlighted the importance of debt management in containing debt-related risks and the associated impact on debt markets. The impact of the crisis on debt levels, and the consequent implications for fiscal consolidation, has been the subject of much discussion and analysis. However, there has been relatively less focus on the issue of how that debt should be managed, including how its composition should be structured so as to mitigate key risk exposures, and its implications for debt market functioning. That task proved significantly complex and challenging through the crisis, particularly in advanced economies, with additional dimensions of risk revealed.

Author : J. Stiglitz
Publisher : Springer
Page : 338 pages
File Size : 10,69 MB
Release : 2014-07-23
Category : Business & Economics
ISBN : 1137411481

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This volume provides a pluralistic discussion from world-renowned scholars on the international aspects of the debt crisis and prospects for resolution. It provides a comprehensive evaluation of how the debt crisis has impacted Western Europe, the emerging markets and Latin America, and puts forward different suggestions for recovery.

Author : Rob Quail
Publisher : John Wiley & Sons
Page : 435 pages
File Size : 33,11 MB
Release : 2011-02-25
Category : Business & Economics
ISBN : 1118017552

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An intelligent analysis of the dangers, opportunities, and consequences of global sovereign debt Sovereign debt is growing internationally at a terrifying rate, as nations seek to prop up their collapsing economies. One only needs to look at the sovereign risk pressures faced by Greece, Spain, and Ireland to get an idea of how big this problem has become. Understanding this dilemma is now more important than ever, that's why Robert Kolb has compiled Sovereign Debt. With this book as your guide, you'll gain a better perspective on the essential issues surrounding sovereign debt and default through discussions of national defaults, systemic risk, associated costs, and much more. Historical studies are also included to provide a realistic framework of reference. Contains up-to-date research and analysis on sovereign debt from today's leading practitioners and academics Details the dangers of defaults and their associated systemic risks Explores the past, present, and future of sovereign debt The repercussions of a national default are all-encompassing as global markets are intricately interwoven in the modern world. Sovereign Debt examines what it will take to overcome the challenges of this market and how you can deal with the uncertainty surrounding it.

Author : Vinod K. Aggarwal
Publisher : Chatham House (Formerly Riia)
Page : 312 pages
File Size : 29,22 MB
Release : 2003
Category : Business & Economics
ISBN :

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This work examines the ongoing debate on resolving sovereign debt defaults and alleviating the debt burden of heavily indebted poor countries. Concentrating primarily on the period from the 1982 and focusing on money owed to both the public and the private sector, the volume examines the origins of debt crises, rescheduling tactics, and efforts to create a more enduring solution to the problem of coping with debt, as well as its efficacy. Policy recommendations are put forward for dealing with the onerous problem of debt default and rescheduling.

Author : M. Ayhan Kose
Publisher : World Bank Publications
Page : 403 pages
File Size : 28,45 MB
Release : 2021-03-03
Category : Business & Economics
ISBN : 1464815453

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The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

Author : Ms.Carmen Reinhart
Publisher : International Monetary Fund
Page : 21 pages
File Size : 26,91 MB
Release : 2013-12-24
Category : Business & Economics
ISBN : 1475553773

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Even after one of the most severe multi-year crises on record in the advanced economies, the received wisdom in policy circles clings to the notion that high-income countries are completely different from their emerging market counterparts. The current phase of the official policy approach is predicated on the assumption that debt sustainability can be achieved through a mix of austerity, forbearance and growth. The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression. As we document, this claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial Repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.