Would Collective Action Clauses Raise Borrowing Costs? An Update and Additional Results
It is easy to say that the International Monetary Fund should not resort to financial rescue for countries in crisis; this is hard to do when there is no alternative. That is where collective action clauses come in. Collective action clauses are de...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/06/437226/would-collective-action-clauses-raise-borrowing-costs-update-additional-results http://hdl.handle.net/10986/19839 |
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okr-10986-198392021-04-23T14:03:46Z Would Collective Action Clauses Raise Borrowing Costs? An Update and Additional Results Eichengreen, Barry Mody, Ashoka BANKRUPTCY BANKRUPTCY PROCEDURES BONDS BORROWING BORROWING COSTS CAPITAL FLOWS CARBON CARBON DIOXIDE CARBON DIOXIDE EMISSIONS CENTRAL BANK CENTRAL BANKS COMMERCIAL BANK DEBT COSTS OF BORROWING CREDIT RATING CREDITORS DEBT DEBT OVERHANG DEBT RESCHEDULING DEBT RESTRUCTURING DEBT SERVICE DEBTS DEFAULT RISK DEVELOPING COUNTRY DEBT ECONOMIC DEVELOPMENT ECONOMICS EMERGING MARKETS EMISSIONS EMISSIONS TAXES ENVIRONMENTAL POLICY EXPORT GROWTH EXPORTS EXTERNAL DEBT FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL SERVICES FORESTRY FREE TRADE GDP GNP GOVERNMENT BONDS GOVERNMENT GUARANTEE GROWTH RATE IMMUNITY INCOME INSOLVENCY INTEREST RATE INTERNATIONAL RESERVES JOINT IMPLEMENTATION LAWS LIQUIDITY MARKET BEHAVIOR MARKET DISCIPLINE MORAL HAZARD MULTILATERAL TRADE PRIVATIZATION REAL GDP SHORT TERM DEBT SOVEREIGN DEBT TAXPAYERS TRADE LIBERALIZATION TREASURY BONDS WATER SUPPLY WELFARE EFFECTS It is easy to say that the International Monetary Fund should not resort to financial rescue for countries in crisis; this is hard to do when there is no alternative. That is where collective action clauses come in. Collective action clauses are designed to facilitate debt restructuring by the principals - borrowers, and lenders - with minimal intervention by international financial institutions. Despite much discussion of this option, there has been little action. Issues of bonds fear that collective action clauses would raise borrowing costs. The authors update earlier findings about the impact of collective action clauses on borrowing costs. It has been argued that only in the past year or so, have investors focused on the presence of these provisions, and that, given the international financial institutions' newfound resolve to "bail in" investors, they now regard these clauses with trepidation. Extending their data to 1999, the authors find no evidence of such changes, but rather the same pattern as before: Collective action clauses raise the costs of borrowing for low-rated issuers, but reduce them for issuers with good credit ratings. Their results hold both for the full set of bonds and for bonds issued only by sovereigns. They argue that these results should reassure those who regard collective action clauses as an important element in the campaign to strengthen international financial architecture. 2014-08-28T18:47:44Z 2014-08-28T18:47:44Z 2000-06 http://documents.worldbank.org/curated/en/2000/06/437226/would-collective-action-clauses-raise-borrowing-costs-update-additional-results http://hdl.handle.net/10986/19839 English en_US Policy Research Working Paper;No. 2363 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
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Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
BANKRUPTCY BANKRUPTCY PROCEDURES BONDS BORROWING BORROWING COSTS CAPITAL FLOWS CARBON CARBON DIOXIDE CARBON DIOXIDE EMISSIONS CENTRAL BANK CENTRAL BANKS COMMERCIAL BANK DEBT COSTS OF BORROWING CREDIT RATING CREDITORS DEBT DEBT OVERHANG DEBT RESCHEDULING DEBT RESTRUCTURING DEBT SERVICE DEBTS DEFAULT RISK DEVELOPING COUNTRY DEBT ECONOMIC DEVELOPMENT ECONOMICS EMERGING MARKETS EMISSIONS EMISSIONS TAXES ENVIRONMENTAL POLICY EXPORT GROWTH EXPORTS EXTERNAL DEBT FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL SERVICES FORESTRY FREE TRADE GDP GNP GOVERNMENT BONDS GOVERNMENT GUARANTEE GROWTH RATE IMMUNITY INCOME INSOLVENCY INTEREST RATE INTERNATIONAL RESERVES JOINT IMPLEMENTATION LAWS LIQUIDITY MARKET BEHAVIOR MARKET DISCIPLINE MORAL HAZARD MULTILATERAL TRADE PRIVATIZATION REAL GDP SHORT TERM DEBT SOVEREIGN DEBT TAXPAYERS TRADE LIBERALIZATION TREASURY BONDS WATER SUPPLY WELFARE EFFECTS |
| spellingShingle |
BANKRUPTCY BANKRUPTCY PROCEDURES BONDS BORROWING BORROWING COSTS CAPITAL FLOWS CARBON CARBON DIOXIDE CARBON DIOXIDE EMISSIONS CENTRAL BANK CENTRAL BANKS COMMERCIAL BANK DEBT COSTS OF BORROWING CREDIT RATING CREDITORS DEBT DEBT OVERHANG DEBT RESCHEDULING DEBT RESTRUCTURING DEBT SERVICE DEBTS DEFAULT RISK DEVELOPING COUNTRY DEBT ECONOMIC DEVELOPMENT ECONOMICS EMERGING MARKETS EMISSIONS EMISSIONS TAXES ENVIRONMENTAL POLICY EXPORT GROWTH EXPORTS EXTERNAL DEBT FINANCIAL CRISES FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL SERVICES FORESTRY FREE TRADE GDP GNP GOVERNMENT BONDS GOVERNMENT GUARANTEE GROWTH RATE IMMUNITY INCOME INSOLVENCY INTEREST RATE INTERNATIONAL RESERVES JOINT IMPLEMENTATION LAWS LIQUIDITY MARKET BEHAVIOR MARKET DISCIPLINE MORAL HAZARD MULTILATERAL TRADE PRIVATIZATION REAL GDP SHORT TERM DEBT SOVEREIGN DEBT TAXPAYERS TRADE LIBERALIZATION TREASURY BONDS WATER SUPPLY WELFARE EFFECTS Eichengreen, Barry Mody, Ashoka Would Collective Action Clauses Raise Borrowing Costs? An Update and Additional Results |
| relation |
Policy Research Working Paper;No. 2363 |
| description |
It is easy to say that the International
Monetary Fund should not resort to financial rescue for
countries in crisis; this is hard to do when there is no
alternative. That is where collective action clauses come
in. Collective action clauses are designed to facilitate
debt restructuring by the principals - borrowers, and
lenders - with minimal intervention by international
financial institutions. Despite much discussion of this
option, there has been little action. Issues of bonds fear
that collective action clauses would raise borrowing costs.
The authors update earlier findings about the impact of
collective action clauses on borrowing costs. It has been
argued that only in the past year or so, have investors
focused on the presence of these provisions, and that, given
the international financial institutions' newfound
resolve to "bail in" investors, they now regard
these clauses with trepidation. Extending their data to
1999, the authors find no evidence of such changes, but
rather the same pattern as before: Collective action clauses
raise the costs of borrowing for low-rated issuers, but
reduce them for issuers with good credit ratings. Their
results hold both for the full set of bonds and for bonds
issued only by sovereigns. They argue that these results
should reassure those who regard collective action clauses
as an important element in the campaign to strengthen
international financial architecture. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Eichengreen, Barry Mody, Ashoka |
| author_facet |
Eichengreen, Barry Mody, Ashoka |
| author_sort |
Eichengreen, Barry |
| title |
Would Collective Action Clauses Raise Borrowing Costs? An Update and Additional Results |
| title_short |
Would Collective Action Clauses Raise Borrowing Costs? An Update and Additional Results |
| title_full |
Would Collective Action Clauses Raise Borrowing Costs? An Update and Additional Results |
| title_fullStr |
Would Collective Action Clauses Raise Borrowing Costs? An Update and Additional Results |
| title_full_unstemmed |
Would Collective Action Clauses Raise Borrowing Costs? An Update and Additional Results |
| title_sort |
would collective action clauses raise borrowing costs? an update and additional results |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/06/437226/would-collective-action-clauses-raise-borrowing-costs-update-additional-results http://hdl.handle.net/10986/19839 |
| _version_ |
1764441535330385920 |