Too Little, Too Late: The Quest to Resolve Sovereign Debt Crises

摘要

Sovereign-debt crises can severely damage the economic prospects of affected economies. During the global financial crisis, governments intervened to rescue distressed banks. The resulting bank bailouts imposed strains on the public finances. Continued poor macroeconomic performance placed the public finances under further stress, leading to several sovereign-debt crises of varying severity (Correa and Sapriza 2015). Notable examples of such crises include Ireland, Greece, Spain, Portugal, and Cyprus, where restructuring of sovereign-debt has been necessary in order to avoid bankruptcy and wider social and political externalities.