Living With Debt: How to Limit the Risks of Sovereign Finance : Economic and Social Progress in Latin America 2007 Report

by Inter-American Development Bank

• ISBN13: 9781597820332
• ISBN10: 1597820334
• Edition: 1st
• Format: Paperback
• Copyright: 2007-03-01
• Publisher: HARVARD UNIVERSITY PRESS

Summary

Living with Debt focuses on how to manage sovereign debt safely and effectively. The report traces the history of sovereign borrowing in Latin America, releases a new data set on public debt, and analyzes the evolution of debt, highlighting the recent trend toward higher levels of domestic debt and lower external borrowing. The report also includes a detailed study of the costs of sovereign defaults such as those that have affected some Latin American countries in recent years. Drawing from in-depth country studies, the report notes the development of domestic debt markets, which have the potential to increase the availability of finance for the private sector and enhance financial markets' stability more generally. However, the report concludes that safely managing domestic debt presents somewhat different--but not necessarily simpler--challenges. In particular, the broader range of debt instruments interacts with the variety of shocks to which economies are exposed, requiring a more comprehensive approach to debt sustainability analysis, which the report outlines.

Table of Contents

Preface

Acknowledgments

Executive Summary

Stylized Facts

Introduction

Public Debt in Latin America and around the World

How Does Debt Grow?

International Borrowing

History of Sovereign Debt in Latin America

The International Emerging Bond Market Today

The Role of Multilateral Lending

The Domestic Market

The Dawn of the Domestic Bond Market

Institutional Investors and the Domestic Debt Market

Debt and the Economy

The Political Economy of Debt

Debt and Development

Fiscal Sustainability in Latin America: Old and New Approaches

The Costs of Default

Towards Safer Debt

The Risks of Sovereign Finance

Lowering the Risks of Sovereign Finance Appendix: Public Debt in Latin America and the Caribbean

Country Profiles

References

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