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dc.titleResearch Insights: Why Are Preferred Creditors Preferred?
dc.contributor.authorCordella, Tito
dc.contributor.authorPowell, Andrew
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.date.available2020-12-18T00:00:00
dc.date.issue2020-12-18T00:00:00
dc.description.abstractIf sovereign borrowers restructure commercial debts, they are still expected to repay preferred creditors such as the IMF, IDB and the other main multilateral development banks (MDBs) in full. Surprisingly, while this status is almost always respected, it is a market custom and does not appear in legal documents. Moreover, existing scholarly work does not provide a justification for why it is so enduring. We found that private and preferred lending can coexist and that it can be in the interest of countries to always repay preferred lenders, as the benefit of future access to credit outweighs the cost of repayment. This explains the persistence of the preferred status.
dc.format.extent4
dc.identifier.doihttp://dx.doi.org/10.18235/0002954
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Research-Insights-Why-Are-Preferred-Creditors-Preferred.pdf
dc.identifier.urlhttps://publications.iadb.org/publications/spanish/document/Perspectivas-de-investigacion-Por-que-son-preferidos-los-acreedores-preferentes.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectSovereign Default
dc.subjectInterest Rate
dc.subjectOrganization Realignment
dc.subjectEmergency Funding
dc.subject.jelcodeF34 - International Lending and Debt Problems
dc.subject.jelcodeO19 - International Linkages to Development • Role of International Organizations
dc.subject.jelcodeH63 - Debt • Debt Management • Sovereign Debt
dc.subject.jelcodeP33 - International Trade, Finance, Investment, Relations, and Aid
dc.typeCatalogs and Brochures
idb.identifier.pubnumberIDB-CB-00478
idb.operationBK-C1102
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