econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 24 May 2016

Chapter 11 For Countries?

from the Philadelphia Fed

-- this post authored by Satyajit Chatterjee

Sovereign default risk has been growing, yet the world lacks an adequate mechanism for averting debt crises. It might be time to resurrect a plan modeled on the U.S. Bankruptcy Code.

For the past 40 years or so, every decade seems to have brought its own brand of international debt problems. In the 1980s, emerging market economies, led by Mexico, defaulted on their debt to private banks. In the 1990s, the fast-growing economies of Thailand, Indonesia, and South Korea teetered on the brink of default. The new millennium brought the 2007 - 2008 financial crisis, the worst the U.S. had experienced since the Great Depression. And this decade has brought the ongoing Greek debt crisis, which for about six months in 2011 had engulfed Italy, Spain, Portugal, and Ireland and threatened to destroy the euro.

Although outright default on foreign borrowing is relatively rare - Argentina, Russia, Ecuador, and Greece have been the only countries to default on their foreign obligations in the past 25 years - even the threat of sovereign default can be very disruptive for countries that experience it.1 Greece, sadly, is a poster child for the chaos that can befall a country when investors begin to doubt its ability to pay its bondholders. Greece was already suffering a recession in 2010 when it became clear to investors that its government was under severe budgetary pressure. Greece's debt was eventually restructured to avoid outright default, but the process was lengthy and extracted a heavy toll on the Greek economy: By the end of 2013, Greece's gross domestic product had fallen 25 percent below its GDP in 2010, and its unemployment rate had climbed to 27 percent. Then, the recovery that had begun in 2014 collapsed amid the political fallout from five years of harsh economic policies, and in 2015 Greece defaulted on its interest payments to the International Monetary Fund (IMF). Although an exit from the euro was averted, Greece's economic situation remains dire.

[click on image below to continue reading]

Source: https://www.philadelphiafed.org/-/media/research-and-data/ publications/ economic-insights/2016/ q2/eiq216_chapter_11.pdf?la=en

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Expected Effects of Petitions to Improve the Monetary System
Energy and Falling Productivity
News Blog
October 2016 Economic Forecast: Outlook Insignificantly Declines But Little Economic Strength Entering 4Q2016
1 Minute. 34 Seconds. In The U.S., That's All It Takes To Register To Vote. A Single Registration Lasts A Lifetime Of Elections. We've Made It Easy For You Here: Http://g.co/elections/134
Durable Goods New Orders Unchanged in August 2016
90% Rally In Sugar Prices Since Late 2015
U.S. Real Wage Growth: Slowing Down With Age - Part 2 Of 2
Infographic Of The Day: Four Tips To Grow Wealth
Early Headlines: Asia Stocks Down, Yen Rises, Oil Soft, Wells CEO Gives Up Bonuses, Trump Didn't Want To Embarass Clinton, US Asset Bubbles, US Crime Rates Falling And More
What is Democracy, Anyway?
Transcript Of Elizabeth Warren Questioning Wells Fargo CEO John Stumpf
Documentary Of The Week: Elizabeth Warren Indictment Of Wells Fargo
Clinton Wins Round One
Why Alzheimer's Research Is Failing To Hit Treatment Targets
Voters Still Distrust Both Presidential Candidates
Investing Blog
Banks Of Absurdity
Investing.com Technical Summary 27 September 2016
Opinion Blog
Trump Stumped In First Debate With Clinton - Will It Cost Him?
Why All Banks Should Be Federally Owned
Precious Metals Blog
War On Cash Turns To $20, $50, And $100 Bills
Live Markets
28Sep2016 Pre-Market Commentary: Wall Street Flat Again This Morning, Crude Prices Rise, US Dollar Down And Prospects Are Dim To Cut Oil Output, GS Says Crude Prices Going Down No Matter What
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved