Covid-19 has unleashed terrible financial effects on governments around the world. How can both governments and creditors find a way to salve these problems? This will be a critical question for billions of people in the years ahead.
As an adviser to governments for more than a century -- including Argentina's recent $66 billion debt restructuring -- Lazard has a deep, first-hand understanding of how to address these questions.
This is the first-ever in a series of new Lazard papers designed to guide the public and financial participants on sovereign debt issues.
There is no perfect answer, of course. But this first paper lays the groundwork for observations and changes to the international financial system that may aid us all.
It explores:
+The wide variation in public debt levels across countries and the fact that each country’s capacity for debt is highly idiosyncratic
+The complex policy trade-offs faced by governments at risk of financial distress
+How a significant evolution in the creditor base is changing the dynamics of debt restructuring.
