@techreport{NBERw11071,
 title = "Structuring and Restructuring Sovereign Debt: The Role of Seniority",
 author = "Patrick Bolton and Olivier Jeanne",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "11071",
 year = "2005",
 month = "January",
 URL = "http://www.nber.org/papers/w11071",
 abstract = {In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure. We show within a simple model how competition for repayment between lenders may result in sovereign debt that is excessively difficult to restructure in equilibrium. Alleviating this inefficiency requires a sovereign debt restructuring mechanism that fulfills some of the functions of corporate bankruptcy regimes, in particular the enforcement of seniority and subordination clauses in debt contracts.},
}