Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279271 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10521
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The loans of the IMF, World Bank, and other multilateral development banks (MDBs) are excluded from debt restructuring. This is the result of their preferred creditor status. There are two justifications for the preferred creditor status of MDBs: (a) they give concessional loans, and (b) they give loans to debt-distressed countries when other lenders would not. In this note, I present a conceptual framework that quantifies the benefit in case (b), discard the preferred creditor status of MDBs, and outline a debt restructuring process that includes MDBs. I also discuss a similar approach by Diwan, Harnoys-Vannier, and Kessler (2023), which also includes MDBs in debt restructuring but quantifies the benefit in case (a).
Subjects: 
concessional loan
debt restructuring
haircut
multilateral development banks
JEL: 
H63
E62
Document Type: 
Working Paper
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