EconPapers    
Economics at your fingertips  
 

Sovereign Defaults in Court

Henrik Enderlein (), Julian Schumacher and Christoph Trebesch ()

No 12777, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: For centuries, defaulting governments were immune from legal action by foreign creditors. This paper shows that this is no longer the case. Building a dataset covering four decades, we find that creditor lawsuits have become an increasingly common feature of sovereign debt markets. The legal developments have strengthened the hands of creditors and raised the cost of default for debtors. We show that legal disputes in the US and the UK disrupt government access to international capital markets, as foreign courts can impose a financial embargo on sovereigns. The findings are consistent with theoretical models with creditor sanctions and suggest that sovereign debt is becoming more enforceable. We discuss how the threat of litigation affects debt management, government willingness to pay, and the resolution of debt crises.

Keywords: debt restructuring; enforcement; government financing; sovereign default (search for similar items in EconPapers)
JEL-codes: F34 G15 H63 K22 (search for similar items in EconPapers)
Date: 2018-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12777 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Sovereign defaults in court (2018) Downloads
Working Paper: Sovereign defaults in court (2018) Downloads
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:cpr:ceprdp:12777

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=12777

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-11-15
Handle: RePEc:cpr:ceprdp:12777