Book Details
Format
eBook
Pages
29
Language
English
Published
May 9, 2014
Publisher
INTERNATIONAL MONETARY FUND
ISBN-10
1282391941
ISBN-13
9781282391949
Description
In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure ex post. We show however, that competition for repayment among lenders may result in a sovereign debt that is excessively difficult to restructure in equilibrium. This inefficiency may be alleviated by a suitably designed bankruptcy regime that facilitates debt restructuring.