Available via the Internet: http://www.financialstabilityboard.org/cos/cos_111001a.htm
See Annex I for a historical review of the Fund’s lending framework and exceptional access policy.
See Box 1 for the four exceptional access criteria that are currently applicable, incorporating the amendment made in May 2010.
For the purpose of making these comparisons, the sample was divided between generally moderate face-value preserving maturity extensions and all other restructurings, with the former being a proxy for “reprofilings.” This dichotomy is artificial, in the sense that debt restructurings in fact lie on a continuum in terms of their impact on NPV, and even face-value preserving operations—if they entail a very long maturity extension—could imply a significant NPV reduction. In the samples used, however, almost all the face-value preserving cases involved a smaller NPV reduction than those cases where reductions in principal were applied.
See Annex I.
See Annex II for a review of sovereign debt restructurings since the 1980s.
Adequate domestic backstops (e.g., bank recapitalization funds) would also have to be in place together with the appropriate bank resolution toolkit.
Staff also examined if the introduction of the original exceptional access framework in 2002 had an impact on countries’ borrowing costs. As shown in Box AIII1 of Annex III, the overall effects were negligible or beneficial for countries with stronger fundamentals.
To assess debt sustainability for the purposes of meeting the exceptional access criteria as well as for broader surveillance and analytical purposes, the Fund focuses on “public debt.” As noted in the DSA staff guidance note, “coverage of public debt in the DSA should be as broad as possible, but consistent with the coverage of the fiscal accounts monitored for surveillance and program purposes, and should take into account the availability (and frequency) of fiscal data” (IMF Policy Paper, available via the internet: http://www.imf.org/external/np/pp/eng/2013/050913.pdf). In practice, a large number of countries report fiscal aggregates only at the general government level but staff is encouraged to include other units in the public sector (e.g., state-owned enterprises) if the they pose fiscal risks. Similarly, “any potential contingent liabilities of the government, including those potentially arising from very high private external indebtedness (as could be the case when the authorities assume liabilities of failed private banks that enjoyed significant foreign financing) should be incorporated into the analysis of public debt sustainability” (Available via the Internet: http://www.imf.org/external/np/pp/eng/2009/031909A.pdf).
Alessandro, Mauro, Guido Sandleris and Alejandro Van Der Ghote, 2011, “Sovereign Defaults and the Political Economy of Market Reaccess,” Business School Working Papers 2011–08, Universidad Torcuato Di Tella.
Brooke, Martin, Rhys Mendes, Alex Pienkowski, and Eric Santor, 2013, “Sovereign Default and State-Contingent Debt,” Bank of England Financial Stability Paper No. 27.
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Eichengreen, Barry, and Richard Portes, 2000, “Debt Restructuring with and without the IMF,” unpublished manuscript, London Business School.
Gelos, Gaston R., Ratna Sahay, and Guido Sandleris, 2011, “Sovereign Borrowing by Developing Countries: What Determines Market Access?” Journal of International Economics, Vol. 83 (2), pp. 243–54.
Grigorian, David A., Trevor Alleyne, and Alejandro D. Guerson, 2012, “Jamaica Debt Exchange, IMF Working Paper 12/244, (Washington: International Monetary Fund).
Grossman, Herschel I., and John B. van Huyck, 1988, “Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation,” American Economic Review, Vol. 78(5), pp. 1088–97.
International Monetary Fund, 2013, “Sovereign Debt Restructuring—Recent Developments and Imp lications for the Fund’s Legal and Policy Framework, ” (Washington).
Richmond, Christine, and Daniel A. Dias, 2009, “Duration of Capital Market Exclusion: Stylized Facts and Determining Factors,” Anderson Graduate School of Management (UCLA) Working Paper (unpublished).
Sandleris, Guido, 2008, “Sovereign Default: Information, Investment and Credit,” Journal of International Economics, Vol. 76(2), pp. 267–75.