On the Preferred Creditor Status of Multilateral Development Banks

J. Atsu Amegashie

No 10521, CESifo Working Paper Series from CESifo

Abstract: The loans of the IMF, World Bank, and other multilateral development banks (MDBs) are excluded from debt restructuring. This is the result of their preferred creditor status. There are two justifications for the preferred creditor status of MDBs: (a) they give concessional loans, and (b) they give loans to debt-distressed countries when other lenders would not. In this note, I present a conceptual framework that quantifies the benefit in case (b), discard the preferred creditor status of MDBs, and outline a debt restructuring process that includes MDBs. I also discuss a similar approach by Diwan, Harnoys-Vannier, and Kessler (2023), which also includes MDBs in debt restructuring but quantifies the benefit in case (a).

Keywords: concessional loan; debt restructuring; haircut; multilateral development banks (search for similar items in EconPapers)
JEL-codes: E62 H63 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp10521.pdf (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:ces:ceswps:_10521

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().