Sovereign Defaults and the Corporation of Foreign Bondholders

Paolo Mauro, Nathan Sussman and Yishay Yafeh

in Emerging Markets and Financial Globalization

Published in print March 2006 | ISBN: 9780199272693
Published online May 2006 | e-ISBN: 9780191603488 | DOI:
 Sovereign Defaults and the Corporation of Foreign Bondholders

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This chapter analyzes the operations of the Corporation of Foreign Bondholders (CFB) — an association of British investors holding bonds issued by foreign governments — between 1870 and 1913. It describes the coordination among creditors fostered by the CFB and evaluates its successes and failures. It is shown that a revamped creditor association might facilitate creditor coordination today and facilitate sovereign debt crisis resolution. The CFB may have had an easier time than a comparable body would have today.

Keywords: Corporation of Foreign Bondholders; sovereign default; bond finance; creditor coordination

Chapter.  13023 words.  Illustrated.

Subjects: Financial Markets

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