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Sovereign Default and Restructuring

IMG Auteur
Nathan Lewis
New World Economics
Published : September 27th, 2015
321 words - Reading time : 0 - 1 minutes
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Sovereign default and restructuring (of debt) looks like it will become a topic of interest going forward, so it would be good to get a little background on the history here.

A "default" means that a borrower (in this case, a government) does not make a scheduled debt payment on time.

A "restructuring" is an agreement between borrowers (governments) and lenders (government bond holders) to change the terms of the debt. Typically, this involves some combination of a reduction in principal, a change in maturity (typically longer), and a change in interest payments (typically lower).

Already, the IMF proposed making Greece's sovereign debt payable in thirty years with low (or no) interest.

http://www.telegraph.co.uk/finance/economics/...ebt-relief.html

With all that in mind, here's a neat database from the Bank of Canada. It's a record of sovereign defaults of all countries worldwide since 1975.

target="_blank" http://www.bankofcanada.ca/2014/02/technical-report-101/

The real action is in an excel spreadsheet, here:
target="_blank"
http://www.bankofcanada.ca/wp-content...e-04-05-15.xlsx


As for restructurings, the NBER has a nice database with at least 153 sovereign debt restructurings since 1980.
http://www.nber.org/data/internati...e/dresc_pdf.pdf
target="_blank"


None of this requires any new currencies, of course. It's really no different than an individual who defaults on a credit card debt, and then gets a call from an agency that offers to accept $0.10 on the dollar to resolve the debt.
target="_blank"
July 12, 2015: Greece Is On The Brink Of Disaster -- Or Raging Success
June 25, 2015: Greece: Planning The Bank Holiday
June 5, 2015: Greece: It's Time For Your Default and Debt Restructuring
May 28, 2015: Greece's 1-2-3 Plan For Default and Amazing Recovery
April 3, 2015: The Greek Government's Revenue Would Rise -- Immediately -- After Tax Reform
March 26, 2015: Greece Needs the Magic Formula to Become the Wealthiest Country in the Eurozone
March 19, 2015: Greece Could Rise To Greatness, Or Become The Next Venezuela
March 12, 2015: Greece's Syriza Could Launch a Libertarian Revolution
February 26, 2015: Greece's Monetary Options
Data and Statistics for these countries : Canada | Greece | Venezuela | All
Gold and Silver Prices for these countries : Canada | Greece | Venezuela | All
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Nathan Lewis was formerly the chief international economist of a firm that provided investment research for institutions. He now works for an asset management company based in New York. Lewis has written for the Financial Times, Asian Wall Street Journal, Japan Times, Pravda, and other publications. He has appeared on financial television in the United States, Japan, and the Middle East.
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