Sovereign debt and default - a history

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  • History is littered with sovereign debt defaults by developed nations

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Sovereign Debt and Default - A History

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The ongoing sovereign debt crisis in Europe continues to weigh heavily on credit markets and political systems throughout the developed world. Greece, after racking up years of unsustainable fiscal deficits, recently defaulted on Euro-denominated bonds held by banks and other investors, and many experts continue to worry about the sovereign debt of much larger European governments like Portugal, Italy and Spain.

For Americans, the idea of sovereign default is more closely associated with Third World emerging economies, not Europe. But finance expert Alex Pollock notes otherwise. In a recent paper published by the American Enterprise Institute, Pollock points out that history is littered with sovereign debt defaults by developed nations - including European countries and even the United States.

OUTLOOK asked Pollock for his perspective on the current sovereign debt crisis - and the lessons history offers about what's happening in Europe today. 

 

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About the Author

 

Alex J.
Pollock
  • Alex J. Pollock is a resident fellow at the American Enterprise Institute (AEI), where he studies and writes about housing finance; government-sponsored enterprises, including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; retirement finance; and banking and central banks. He also works on corporate governance and accounting standards issues.


    Pollock has had a 35-year career in banking and was president and CEO of the Federal Home Loan Bank of Chicago for more than 12 years immediately before joining AEI. A prolific writer, he has written numerous articles on financial systems and is the author of the book “Boom and Bust: Financial Cycles and Human Prosperity” (AEI Press, 2011). He has also created a one-page mortgage form to help borrowers understand their mortgage obligations.


    The lead director of CME Group, Pollock is also a director of the Great Lakes Higher Education Corporation and the chairman of the board of the Great Books Foundation. He is a past president of the International Union for Housing Finance.


    He has an M.P.A. in international relations from Princeton University, an M.A. in philosophy from the University of Chicago, and a B.A. from Williams College.


  • Phone: 202.862.7190
    Email: apollock@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: (202) 419-5212
    Email: emily.rapp@aei.org

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