Default Episodes in the 90s: Factbook and Preliminary Lessons
by Federico Sturzenegger of the Universidad Torcuato Di Tella
Introduction: Since the Tequila crisis in 1994, and particularly after the succession of crises in Asia and the default episode in Russia, questions related to international sovereign bond restructuring have been increasingly at the forefront of policy discussions in emerging economies. Concepts like crisis prevention and resolution, international financial architecture, moral hazard risks and private sector involvement have been discussed profusely in the context of each new default episode. While these questions, key to the international financial community, have received much deserved attention, the discussion has been one-sided, focusing on the role of the international financial institutions (IFIs) and of G-7 countries. The debate within emerging economies as to how to react and as to what can be learnt from previous default experiences has received much less attention.