Co‐ordination Failure, Moral Hazard and Sovereign Bankruptcy Procedures

Bibliographic Data

ID9704372
AuthorsSayantan Ghosal (0000-0001-6216-5810, University of Warwick), Marcus Miller (0000-0003-1030-457X, University of Warwick and CEPR)
Year2003
Volume113
Issue487
Pages276-304
Publication date2003-04-01
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/1468-0297.00125
OpenAlexW2142149075
LanguageEN
Citations received3
References cited17

We study a model of sovereign debt crisis that combines problems of creditor coordination and debtor moral hazard. Solving the sovereign debtor's incentives leads to excessive 'rollover failure' by creditors when sovereign default occurs. We discuss how the incidence of crises might be reduced by international sovereign bankruptcy procedures and relate this to the current debate on revising international financial architecture. Paper prepared for Bank of England Conference on 'The Role of the Official and Private Sectors in Resolving International Financial Crises', London, and for the Latin American Meeting of the Econometric Society, Sao Paolo, Brazil. (Preliminary draft circulated for comments, please do not cite without reference to the authors)

Bankruptcy · Business · Creditor · Debt · Debtor · Default · Economics · Financial system · Incentive · Market economy · Moral hazard · Political science · Politics · Restructuring · Sovereign debt · Sovereign default · Sovereignty · Banking stability, regulation, efficiency · Economic Theory and Policy · Finance · Global Financial Crisis and Policies · Law

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