The Balcony: Debt Defaults and Lessons from a Decade of Crises

The Balcony reviews Debt Defaults and Lessons from a Decade of Crises, by Federico Sturzenegger and Jeromin Zettelmeyer (2007). Vera: seven country defaults after 1998, each measured alike; chapter eight, Argentina, where investors lost 71 to 75 percent. Augie: chapter ten is the heart, Uruguay asked nicely and investors lost about 13 percent. His objection: the authors admit they study only crises that happened. They agree on Argentina's Congress cheering a default when 60 percent of the debt was Argentine. Split verdict: keep the haircut tables; keep Uruguay, mercy has a price too.

Debt Defaults and Lessons from a Decade of Crises, by Federico Sturzenegger and Jeromin Zettelmeyer, 2007, documents seven emerging-market defaults and restructurings from 1998 to 2005 and measures each the same way: Argentina's 2001 default on more than $100 billion, celebrated in its Congress though 60 percent of the debt was held by Argentines, ended in a 2005 exchange where investors lost 71 to 75 percent, while Uruguay's gentle 2003 exchange cost investors about 13 percent but bought the country little debt relief; the authors admit their method studies only the crises that happened.

On the book: Debt Defaults and Lessons from a Decade of Crises by Federico Sturzenegger, Jeromin Zettelmeyer

Starring

DotVera LindqvistAugie Castellano