Debt distress: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Create page. Sources: Linked pages.) |
imported>Doug Williamson (Compare and contrast with financial distress.) |
||
| (One intermediate revision by the same user not shown) | |||
| Line 6: | Line 6: | ||
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.'' | |||
| Line 18: | Line 21: | ||
== See also == | == See also == | ||
* [[Credit rating]] | * [[Credit rating]] | ||
* [[Credit risk]] | * [[Credit risk]] | ||
| Line 24: | Line 26: | ||
* [[Downgrade]] | * [[Downgrade]] | ||
* [[eurozone crisis]] | * [[eurozone crisis]] | ||
* [[Financial distress]] | |||
* [[Firm]] | * [[Firm]] | ||
* [[Fiscal]] | * [[Fiscal]] | ||
| Line 35: | Line 38: | ||
* [[Sovereign debt crisis]] | * [[Sovereign debt crisis]] | ||
* [[Sovereign risk]] | * [[Sovereign risk]] | ||
Latest revision as of 07:47, 23 September 2022
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
