Financial Emergencies: Default and Bankruptcy

James E. Spiotto

in The Oxford Handbook of State and Local Government Finance

Published in print March 2012 | ISBN: 9780199765362
Published online September 2012 | | DOI:

Series: Oxford Handbooks

 Financial Emergencies: Default and Bankruptcy

More Like This

Show all results sharing these subjects:

  • Economics
  • Public Economics
  • Financial Markets


Show Summary Details


The Great Recession and its aftermath resurrected concerns that state and local governments would begin to default on their obligations. Many feared that the long and successful history of state and local borrowing in the capital markets was destined to end. As spending needs swamped resources, finding easier ways out of public debt than repaying it as promised might become politically fashionable. This article explains and evaluates the various mechanisms that might deal with municipal and state defaults and insolvencies in the United States. It first explores the historical underpinnings of restructuring municipal debt, providing examples of successes and failures of such efforts in the United States. The era of the Great Depression of the 1930s and its precursors is examined, as is the existing statutory framework for municipal bankruptcy in the United States. Sovereign debt by states and its resolution is also discussed.

Keywords: bankruptcy; Great Recession; local borrowing; local governments; capital markets; public debt; municipal debt

Article.  10226 words. 

Subjects: Economics ; Public Economics ; Financial Markets

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Oxford University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.