Costs of Sovereign Defaults Restructuring Strategies and Financial Intermediation
Author | : Tamon Asonuma |
Publisher | : |
Total Pages | : 0 |
Release | : 2023 |
ISBN-10 | : OCLC:1378819869 |
ISBN-13 | : |
Rating | : 4/5 ( Downloads) |
Download or read book Costs of Sovereign Defaults Restructuring Strategies and Financial Intermediation written by Tamon Asonuma and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sovereign debt restructurings are associated with declines in the growth of GDP, investment, bank credit to the private sector and capital flow. Our empirical findings show that the intensity of these losses depends on two aspects: whether the restructuring preempts a default and the extent of the country's reliance on bank intermediation. Post-default restructurings are associated with worse outcomes than restructurings that take place preemptively without payments and going into default. Much of that difference is driven by the adverse effects following all restructuring strategies in countries with relatively large banking sectors, while the largest losses in post-default episodes.