Study: Painful ‘haircuts’ lead to lower debt

By Phil Thornton
03 Oct 2019

Crisis-hit countries that go through a painful debt restructuring programme as part of a bailout enjoy much steeper cuts in their medium-term debt, according to an independent analysis of International Monetary Fund rescue programmes.

A study by the Institute of International Finance, a trade body representing large banks that lend into emerging markets, found all but three of 25 recent IMF programmes saw a reduction in debt increase over five years, with an average decline of 27%.

The 16 economies that restructured ...

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