A Journey in the History of Sovereign Defaults on Domestic-Law Public Debt

Aitor Erce, Enrico Mallucci and Mattia Osvaldo Picarelli

No 1338, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We introduce a novel database on sovereign defaults that involve public debt instruments governed by domestic law. By systematically reviewing a large number of sources, we identify 134 default and restructuring events of domestic debt instruments, in 52 countries from 1980 to 2018. Domestic-law defaults are a global phenomenon. Over time, they have become larger and more frequent than foreign-law defaults. Domestic-law debt restructurings proceed faster than foreign ones, often through extensions of maturities and amendments to the coupon structure. While face value reductions are rare, net-present-value losses for creditors are still large. Unilateral amendments and post-default restructuring are the norm, but negotiated pre-default restructurings are becoming increasingly frequent. We also document that domestic-law defaults typically involve debt denominated in local currency and held by resident investors. We complement our analysis with a collection "sovereign histories", which provide the fine details about each episode.

Keywords: Public debt; Sovereign default; Domestic law; Database (search for similar items in EconPapers)
JEL-codes: E62 E65 F34 G01 H12 H63 K00 K41 (search for similar items in EconPapers)
Date: 2022-03-18
New Economics Papers: this item is included in nep-fdg, nep-his, nep-law, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.federalreserve.gov/econres/ifdp/files/ifdp1338.pdf (application/pdf)

Related works:
Working Paper: A journey in the history of sovereign defaults on domestic-law public debt (2022)
Working Paper: A Journey in the History of Sovereign Defaults on Domestic Law Public Debt (2021)
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:fip:fedgif:1338

DOI: 10.17016/IFDP.2022.1338

Access Statistics for this paper

More papers in International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().