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This paper builds a model of a sovereign borrower that has access to credit from private sector creditors and an IFI. Private sector creditors and the IFI offer different debt contracts that are modelled based on the institutional frameworks of these two types of debt. We analyze the decisions of a sovereign on how to allocate its borrowing needs between these two types of creditors, and when to default on its debt to the private sector creditor. The numerical analysis shows that, consistent with the data; the model predicts countercyclical IFI debt along with procyclical commercial debt flows, also matching other features of the data such as frequency of IFI borrowing and mean IFI debt stock.

This article studies human rights due diligence by private corporate creditors in the context of sovereign debt restructurings. First, the legal bases of this specific due diligence are presented and systematized. Then, by providing empirical statistical evidence, the article analyses whether haircuts applied by creditors across countries regularly consider the social and economic human rights situation of the debtor countries in question, as part of creditors’ due diligence. Also, the main characteristics of bond markets that contribute to understanding the asymmetric power relationship between private lenders and sovereign borrowers are described. Finally, Argentina’s latest debt restructurings are studied in depth to determine whether human rights were taken into account when agreeing on the size of haircuts. From quantitative and qualitative data, this article concludes that the haircuts agreed by creditors are regularly not sensitive to the social and economic human rights situation of debtor populations or to the impact that debt agreements could have on them.

The paper examines the evolution of public sector debt levels and structures in 12 emerging market countries around the time of financial crises. In particular, it focuses on whether the debt situation of sovereign borrowers became more vulnerable in the aftermath of crises. The principal findings are that (i) debt levels tend to increase significantly post-crisis, and (ii) countries often experience more rigid debt structures following such events, with an increase in the share of external public debt to multilateral creditors and a greater exposure of the domestic banking system to sovereign debt.

The present work approaches the legal institution of the restructuring of budgetary claims from the perspective of the procedure to be followed by the tax debtors interested in agreeing on the need to extinguish their budgetary claims with the desire to avoid the insolvency of the company. We bring up that the restructuring of budgetary claims was thought so as to offer a helping hand, especially to large companies in a situation of major financial difficulty. This present study aims to provide a synthetic picture of the steps to be followed in order to successfully complete this procedure. For this, the procedure is divided into three stages, namely the pre-stage, the procedure itself and the completion of the procedure. The acts to be performed at the pre-stage refer to the notification of the restructuring intention, the restructuring plan and the prudent private creditor test. The stage itself of the restructuring starts with the submission of the application to the tax authority, which will be settled by it either with a decision approving the restructuring or with a decision rejecting it, or with a decision approving a payment facility. Once the restructuring is approved, it will be carried out in accordance with the restructuring plan, under the supervision of the persons designated for this purpose. During its development, the restructuring process may undergo changes that will materialize either in the modification of the restructuring plan or in the modification of the payment facilitation decision, if such a facility has been approved. Whether there is a change in the restructuring process, or not, once it has started, it will have to be completed. If the restructuring plan is successfully implemented, the fiscal debtor's budgetary claims will be extinguished and he will be able to go on with the economic activity for which he was established. If, however, the restructuring plan fails, the tax debtor risks being subject to forced execution by the tax authority, or even to request its insolvency, which could lead to the cessation of its existence.

This paper proposes a new empirical measure of cooperative versus conflictual crisis resolution following sovereign default and debt distress. The index of government coerciveness is presented as a proxy for excusable versus inexcusable default behaviour and used to evaluate the costs of default for the domestic private sector, in particular its access to international debt markets. Our findings indicate that unilateral, aggressive sovereign debt policies lead to a strong decline in corporate access to external finance (loans and bond issuance). We conclude that coercive government actions towards external creditors can have strong signalling effects with negative spillovers on domestic firms. \"Good faith\" debt renegotiations may be crucial to minimize the domestic costs of sovereign defaults.

This paper presents a simple model of optimal reserves that can be easily calibrated to compute optimal reserves as well as the implied probability of a sudden stop for given reserves. The model builds upon the global games framework of Morris and Shin to establish a unique relationship between the probability of a sudden stop and the level of reserves. The calibration results for 15 selected emerging market countries in Latin America, Asia and other regions over the sample period of 1993-2006 suggest that the risk of sudden stops may have declined to a low level in recent years in all countries in the sample. The results also suggest that Asia and Russia may have been significantly over insured since early 2000s with estimated excess reserves of US$ 1 trillion in total at end-2006.

(Series Information) European Papers - A Journal on Law and Integration, 2019 4(1), 365-376 | European Forum Insight of 25 March 2019 | (Table of Contents) I. Introduzione: l'art. 107, par. 3, lett. b), TFUE e la crisi finanziaria del 2008. - II. Dal salvataggio di FIH Erhvervsbank alla sentenza della Corte di giustizia. - III. Alcuni precedenti relativi al salvataggio di imprese e banche in difficoltà. - IV. La soluzione proposta dall'AG Szpunar e un'altra strada verso la medesima risposta. - V. Conclusioni. | (Abstract) In Commission v. FIH Holding and FIH Erhvervsbank (judgement of 6 March 2018, case C-579/16 P), the Court of Justice dealt with the case of a bank, beneficiary of an aid scheme, that had already been granted a number of benefits, which were approved by the European Commission as aid schemes compatible with the internal market. The Court held that when applying the private creditor test, the risks related to previously granted aid schemes should not be taken into consideration during the assessment of a new measure. The purpose of this Insight is to clarify the limits of the private creditor test in a bank-bail-out scenario and provide further elements that confirm the Court's reasoning.

The data and analysis presented in this edition of global development finance are based on actual flows and debt related transactions for 2010 reported to the World Bank Debtor Reporting System (DRS) by 129 developing countries. The reports confirm that in 2010 international capital flows to developing countries surpassed preliminary estimates and returned to their pre-crisis level of $1.1 trillion, an increase of 68 percent over the comparable figure for 2009. Private capital flows surged in 2010 driven by a massive jump in short-term debt, a strong rebound in bonds and more moderate rise in equity flows. Debt related inflows jumped almost 200 percent compared to a 25 percent increase in net equity flows. The rebound in capital flows was concentrated in a small group of 10 middle income countries where net capital inflows rose by an average of nearly 80 percent in 2010, almost double the rate of increase (44 percent) recorded by other developing countries. These 10 countries accounted for 73 percent of developing countries gross national income (GNI), and received 73 percent of total net capital flows to developing countries in 2010. The 2010 increase in net capital flows was accompanied by marked change in composition between equity and debt related flows. Over the past decade net equity flows to developing countries have consistently surpassed the level of debt related flows, reaching as high as 97 percent of aggregate net capital flows in 2002 and accounting for 75 percent of them ($509 billion) in 2009. However, periods of rapid increase in capital flows have often been marked by a reversal from equity to debt.