Arbeitspapier

Sovereign defaults: The price of haircuts

A main puzzle in the sovereign debt literature is that defaults have only minor effects on subsequent borrowing costs and access to credit. This paper comes to a different conclusion. We construct the first complete database of investor losses (haircuts) in all restructurings with foreign banks and bondholders from 1970 until 2010, covering 180 cases in 68 countries. We then show that restructurings involving higher haircuts are associated with significantly higher subsequent bond yield spreads and longer periods of capital market exclusion. The results cast doubt on the widespread belief that credit markets forgive and forget.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 3604

Klassifikation
Wirtschaft
International Lending and Debt Problems
International Financial Markets
Thema
sovereign debt crises
restructuring
reputation

Ereignis
Geistige Schöpfung
(wer)
Cruces, Juan J.
Trebesch, Christoph
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2011

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Cruces, Juan J.
  • Trebesch, Christoph
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2011

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