Financial exclusion and sovereign default: the role of official lenders

María Bru Muñoz ()
Additional contact information
María Bru Muñoz: Banco de España

No 2206, Working Papers from Banco de España

Abstract: Is financial exclusion after default a relevant driver of sovereign default incentives? I find new evidence that suggests that this is not the case, and that there are substantial differences in the behavior of different lenders after a sovereign default. Private lenders tend to decrease their funding to developing countries that have defaulted to banks or to the Paris Club. But the financing from official creditors, i.e. bilateral and multilateral, remains mainly unaffected by the different sovereign defaults, only with some exceptions mostly related to defaults to multilateral lenders. This different pattern for official financing is very relevant since official loans are the main source of funds for developing economies. Official creditors continue offering funding to countries even after default, casting doubt on the relevance of one of the main assumptions in sovereign default models, the so-called financial exclusion.

Keywords: sovereign default; financial exclusion; heterogeneous lenders; official creditors; emerging markets. (search for similar items in EconPapers)
JEL-codes: F34 G15 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2022-03
New Economics Papers: this item is included in nep-ban and nep-cwa
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bde.es/f/webbde/SES/Secciones/Publicac ... 22/Files/dt2206e.pdf First version, March 2021 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:2206

Access Statistics for this paper

More papers in Working Papers from Banco de España Contact information at EDIRC.
Bibliographic data for series maintained by Ángel Rodríguez. Electronic Dissemination of Information Unit. Research Department. Banco de España ().