Debt owing by the government or residents of one country to the government or residents of another, or to an international institution. Such debt takes various forms: it may be long- or short-dated; fixed-interest or floating-rate debt; and denominated in the currency of the lender, the borrower, some third currency such as the US dollar, or an international currency unit such as the Euro. The borrower may be a private sector body, or a government: government or sovereign debt cannot be collected by any legal process unless the government chooses to submit to it. The lenders may be individuals or investment institutions holding bonds, banks making short-term loans, national governments or government-funded institutions, or international bodies such as the International Bank for Reconstruction and Development (or World Bank). Because lenders prefer varied portfolios, many countries both lend and borrow internationally.
Subjects: Economics — Politics.