Debt distress: Difference between revisions
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However, debt distress is a broader concept, also including situations where the borrower has not yet defaulted on its borrowing obligations. | However, debt distress is a broader concept, also including situations where the borrower has not yet defaulted on its borrowing obligations. | ||
Debt distress is a more serious form of ''financial distress.'' | |||
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== See also == | == See also == | ||
* [[Credit rating]] | * [[Credit rating]] | ||
* [[Credit risk]] | * [[Credit risk]] | ||
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* [[Downgrade]] | * [[Downgrade]] | ||
* [[eurozone crisis]] | * [[eurozone crisis]] | ||
* [[Financial distress]] | |||
* [[Firm]] | * [[Firm]] | ||
* [[Fiscal]] | * [[Fiscal]] | ||
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* [[Sovereign debt crisis]] | * [[Sovereign debt crisis]] | ||
* [[Sovereign risk]] | * [[Sovereign risk]] | ||
== | ==Other resource== | ||
*[https://www.worldbank.org/en/publication/wdr2022 IMF - World Development Report - 2022] | *[https://www.worldbank.org/en/publication/wdr2022 IMF - World Development Report - 2022] | ||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
[[Category:Identify_and_assess_risks]] | |||
[[Category:Long_term_funding]] | [[Category:Long_term_funding]] | ||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
[[Category:Risk_reporting]] | |||
[[Category:Risk_frameworks]] | [[Category:Risk_frameworks]] | ||
[[Category: | [[Category:The_business_context]] | ||
Latest revision as of 12:16, 20 May 2025
Credit risk - borrowings.
Debt distress is a situation in which a borrower is unable to meet its financial obligations to creditors.
Borrowers in default are - by definition - in debt distress.
However, debt distress is a broader concept, also including situations where the borrower has not yet defaulted on its borrowing obligations.
Debt distress is a more serious form of financial distress.
- Self-fulfilling dynamics in debt distress
- "Governments that are near or in debt distress do not have room to provide even temporary fiscal support to firms and households.
- Moreover, an increase in the risk of debt distress typically leads to a downgrade in the sovereign credit rating, which sets off self-fulfilling dynamics because the downgrade itself deteriorates macroeconomic fundamentals and the access to capital by private firms."
- International Monetary Fund - World Development Report 2022 - p207.
See also
- Credit rating
- Credit risk
- Default
- Downgrade
- eurozone crisis
- Financial distress
- Firm
- Fiscal
- Household
- Private
- Private sector
- Recession
- Rescheduling
- Restructuring
- Sovereign debt
- Sovereign debt crisis
- Sovereign risk
