Debt maturity structure with pre-emptive creditors

Gai, Prasanna; Shin, Hyun Song

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Debt maturity structure with pre-emptive creditors

Date

2004

Authors

Gai, Prasanna

Shin, Hyun Song

Publisher

Elsevier

Abstract

Critics of international solvency regimes argue that such regimes heighten financial fragility because creditors pre-empt each other by lending at ever shorter maturities in a 'rush for the exits'. We model such behaviour explicitly in order to examine the effects of workouts on the maturity profile of debt.