Sovereign Debt Repatriation During Crises

By Serkan Arslanalp, Laura Sunder-Plassmann

May 6, 2022

Preview Citation

Format: Chicago

Serkan Arslanalp, and Laura Sunder-Plassmann. Sovereign Debt Repatriation During Crises, (USA: International Monetary Fund, 2022) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We use a new, comprehensive data set on the sovereign debt investor base to document three novel empirical facts: (i) sovereign debt is repatriated - that is, shifted from external private to domestic investors - prior to sovereign defaults; (ii) not all crises are equal: evidence for repatriation during banking and currency crises is more limited; and (iii) the nature of defaults matters: external investors do not leave during preemptive debt restructurings. We further show that repatriation appears to be prevalent when defaults happen in large markets with low capital controls. The data set we use is uniquely suited to analyzing investor base dynamics during rare crises due to its large cross-section and time series, covering 180 countries from 1989 to 2020.

Subject: Currency crises, Debt default, External debt, Financial crises, National accounts, Private debt, Public debt

Keywords: Analyzing investor base dynamics, Banking crisis, Capital flows, Caribbean, Currency crises, Currency crisis, Debt default, Debt maturity, External debt, External investor, Financial crisis, Global, Investor base, Investor database, Private debt, Sovereign debt, Sovereign default

Publication Details

Pages:

43
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2022/077
Stock No:

WPIEA2022077
ISBN:

9798400207211
ISSN:

1018-5941

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