Sovereign Debt Restructurings: Delays in Renegotiations and Risk Averse Creditors
Tamon Asonuma () and
Hyungseok Joo ()
No 1119, School of Economics Discussion Papers from School of Economics, University of Surrey
Foreign creditors' business cycles influence both the process and the outcome of sovereign debt restructurings. We compile two datasets on creditor committees and chairs and on creditor business and financial cycles at the restructurings, and find that when creditors experience high GDP growth, restructurings are delayed and settled with smaller haircuts. To rationalize these stylized facts, we develop a theoretical model of sovereign debt with multi-round renegotiations between a risk averse sovereign debtor and a risk averse creditor. The quantitative analysis of the model shows that high creditor income results in both longer delays in renegotiations and smaller haircuts. Our theoretical predictions are supported by data.
JEL-codes: F34 F41 H63 (search for similar items in EconPapers)
Pages: 72 pages
New Economics Papers: this item is included in nep-dge, nep-opm and nep-upt
References: Add references at CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:sur:surrec:1119
Access Statistics for this paper
More papers in School of Economics Discussion Papers from School of Economics, University of Surrey Contact information at EDIRC.
Bibliographic data for series maintained by Ioannis Lazopoulos ().