"A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full when due."
Borrowing by a country or company from foreign lenders.
International Financial System: Understanding the global financial system and how it operates is crucial for understanding international debt.
Foreign Exchange Markets: Understanding exchange rates and currency movements is necessary for understanding international debt.
International Capital Markets: Understanding capital markets and how they operate is crucial for understanding international debt.
International Monetary Fund (IMF): Understanding the role of the IMF in managing international debt is important.
World Bank: Understanding the role of the World Bank in managing international debt is also important.
Sovereign Debt: Understanding the nature of sovereign debt and how it is managed is fundamental in international finance.
Debt Restructuring: Understanding how to restructure sovereign debt is significant in international finance.
Debt Sustainability: Understanding the concept of debt sustainability and how it is measured is critical in international finance.
Debt to GDP Ratio: Understanding the relationship between debt and GDP in measuring an economy's debt level is important.
Debt Servicing: Understanding debt servicing and how it works is necessary for managing international debt.
Credit Ratings: Understanding credit ratings and how they are used to evaluate a country's creditworthiness is crucial in international finance.
Emerging Market Debt: Understanding the nature of emerging market debt is important for assessing international debt.
External Debt: Understanding external debt and how it is managed is crucial for international finance.
Debt Relief: Understanding debt relief and how it is used to manage international debt is significant.
Debt Financing: Understanding the different forms of debt financing, such as bonds and loans, is crucial in understanding international finance.
Currency Risk: Understanding the risks associated with currency movements is important in international finance.
Interest Rates: Understanding interest rates and how they affect international debt is crucial.
International Financial Reporting Standards (IFRS): Understanding accounting standards for international financial reporting is significant in managing international debt.
Debt Issuance: Understanding the process of debt issuance and how it is used to finance international debt is essential in international finance.
Hedge Funds and Asset Management: Understanding the role of hedge funds and asset management in managing international debt is important.
Sovereign debt: This is the debt owed by a national government to its creditors, including bonds and other financial instruments.
Commercial bank loans: These are loans borrowed from banks, usually by corporations or government entities, in order to finance projects and other activities.
Multilateral debt: This is debt that is owed to international organizations such as the World Bank or the International Monetary Fund (IMF), for purposes such as infrastructure building or emergency relief.
Bilateral debt: This is debt that is owed directly to another government.
Export-import debt: These are loans taken out to finance exports and imports between different countries.
Foreign currency debt: This is debt that is denominated in a foreign currency, which can be subject to fluctuations in exchange rates.
Eurobonds: These are bonds issued by corporations or governments outside of their home country, usually in a currency other than their own.
Syndicated loans: These are loans made by a group of lenders, often in different countries, to a single borrower.
Trade credit: This is credit extended by one company to another for the purchase of goods or services.
Structured debt: This is debt that is packaged in a complex financial structure, often involving derivatives, that can have a high degree of risk but also potentially high returns.
"Cessation of due payments (or receivables) may either be accompanied by that government's formal declaration that it will not pay (or only partially pay) its debts (repudiation), or it may be unannounced."
"A credit rating agency will take into account in its gradings capital, interest, extraneous and procedural defaults, and failures to abide by the terms of bonds or other debt instruments."
"Countries have at times escaped some of the real burden of their debt through inflation. This is not 'default' in the usual sense because the debt is honored, albeit with currency of lesser real value."
"Sometimes governments devalue their currency. This can be done by printing more money to apply toward their own debts, or by ending or altering the convertibility of their currencies into precious metals or foreign currency at fixed rates."
"A dramatic rise in the interest rate faced by a government due to fear that it will fail to honor its debt is sometimes called a sovereign debt crisis."
"Governments may be especially vulnerable to a sovereign debt crisis when they rely on financing through short-term bonds, since this creates a maturity mismatch between their short-term bond financing and the long-term asset value of their tax base."
"Since a sovereign government, by definition, controls its own affairs, it cannot be obliged to pay back its debt. Nonetheless, governments may face severe pressure from lending countries... if few bonds in their own currency are accepted abroad, and so the country issues mainly foreign currency-denominated bonds, a decrease in the value of their own currency can make it prohibitively expensive to pay back those bonds."
"Today, a government that defaults may be widely excluded from further credit; some of its overseas assets may be seized; and it may face political pressure from its own domestic bondholders to pay back its debt."
"Instead, they often enter into negotiations with their bondholders to agree on a delay (debt restructuring) or partial reduction of their debt (a 'haircut or write-off')."
"Some economists have argued that, in the case of acute insolvency crises, it can be advisable for regulators and supranational lenders to preemptively engineer the orderly restructuring of a nation's public debt."
"The International Monetary Fund often lends for sovereign debt restructuring."
"To ensure that funds will be available to pay the remaining part of the sovereign debt, it has made such loans conditional on action such as reducing corruption, imposing austerity measures such as reducing non-profitable public sector services, raising the tax take (revenue) or more rarely suggesting other forms of revenue raising such as nationalization of inept or corrupt but lucrative economic sectors."
"A recent example is the Greek bailout agreement of May 2010."
"After the 2008 financial crisis, in order to avoid a sovereign default, Spain and Portugal, among other countries, turned their trade and current account deficits into surpluses." (Note: Some questions may not have direct quotes answering them. In such cases, I have provided paraphrased answers based on information from the paragraph.)