How factors in creditor countries affect secondary market prices for developing country debt

Bank loans to many developing countries trade at a discount on the secondary market. These discounts are typically assumed to reflect only the repayment prospects of the borrower country. But the authors demonstrate that factors in the creditor countries have a major impact on secondary market price...

• Main Authors: zler, Sule, Huizinga, Harry
• Corporate Author: Banco Mundial
• Format: Book
• Published: Washington, D.C. World Bank March 1991
• Series: Policy, research, and external affairs working papers no. WPS 622
• Subjects: PRESTAMOS; MERCADO SECUNDARIO; MODELOS ECONOMETRICOS; DEUDA EXTERNA; ESTADOS UNIDOS; PAISES EN DESARROLLO; TERCER MUNDO

Table of Contents:

• 1. Introduction
• 2. Does bank exposure affect secondary market prices?
• 3. How does deposit insurance affect secondary market prices?
• 4. Are the results a consequence of implicit insurance?
• 5. Concluding remarks
• References
• Endnotes
• Tables.