05207oam 22012854 450 991095679180332120250426110507.097866138209389781462321551146232155097814527582131452758212978128244728812824472899781451987171145198717X(CKB)3360000000443132(EBL)3014373(SSID)ssj0001478558(PQKBManifestationID)11810660(PQKBTitleCode)TC0001478558(PQKBWorkID)11469901(PQKB)10438195(OCoLC)712989257(MiAaPQ)EBC3014373(IMF)WPIEE2006176(IMF)WPIEA2006176WPIEA2006176(EXLCZ)99336000000044313220020129d2006 uf 0engurcn|||||||||txtccrLending Resumption After Default : Lessons from Capital Markets During the 19th Century /Juan Sole1st ed.Washington, D.C. :International Monetary Fund,2006.1 online resource (28 p.)IMF Working Papers"July 2006".9781451864366 1451864361 Includes bibliographical references.""Contents""; ""I. MOTIVATION""; ""II. HISTORICAL EVIDENCE ON DEFAULT AND LENDING RESUMPTION""; ""III. THE ENVIRONMENT""; ""IV. OBSERVABLE TYPES""; ""V. UNOBSERVABLE TYPES""; ""VI. CONCLUDING REMARKS""; ""PROOFS OF PROPOSITIONS 3 AND 4 ""; ""REFERENCES""This paper mines the experience of capital markets during the 19th century to propose an alternative way of interpreting international default episodes. The standard view is that defaulting on sovereign debt entails exclusion from capital markets. Yet we have observed multiple instances of sovereign debt default in which the reaction of lenders was not the one predicted by the punishment story: in some cases, lending ceased for long periods, but in others it was not interrupted. This paper claims that the reaction of lenders after default stems from the additional knowledge about the borrower that lenders acquire during these episodes. The lending relationship is modeled in a costly state-verification environment in which governments have private information about their investment projects (good or bad). It is shown that, in the event of default, it is worthwhile for lenders to find out more about the type of project, and then interrupt lending only if the project is believed to be a bad one.IMF Working Papers; Working Paper ;No. 2006/176Debts, PublicDefault (Finance)BanksimfCapital marketimfConsumptionimfCreditimfDepository InstitutionsimfEconomicsimfEnvironmentimfEnvironmental EconomicsimfEnvironmental economicsimfEnvironmental Economics: GeneralimfEnvironmental sciencesimfFinanceimfFinance: GeneralimfGeneral Financial Markets: General (includes Measurement and Data)imfIndustries: Financial ServicesimfInternational capital marketsimfLoansimfMacroeconomicsimfMacroeconomics: ConsumptionimfMicro Finance InstitutionsimfMonetary economicsimfMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralimfMoney and Monetary PolicyimfMortgagesimfSavingimfWealthimfBulgariaimfDebts, Public.Default (Finance)BanksCapital marketConsumptionCreditDepository InstitutionsEconomicsEnvironmentEnvironmental EconomicsEnvironmental economicsEnvironmental Economics: GeneralEnvironmental sciencesFinanceFinance: GeneralGeneral Financial Markets: General (includes Measurement and Data)Industries: Financial ServicesInternational capital marketsLoansMacroeconomicsMacroeconomics: ConsumptionMicro Finance InstitutionsMonetary economicsMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralMoney and Monetary PolicyMortgagesSavingWealthSole Juan1159164DcWaIMFBOOK9910956791803321Lending Resumption After Default4371254UNINA