Re-Accessing International Capital Markets After Financial Crises

The paper analyzes the factors that contribute to the re-access of countries that emerge from a severe financial crisis to the international capital markets. It conjectures that these factors depend on a sovereign''s commitment and ability to repay its foreign debt, signaled by sound macroeconomic policies, and the global liquidity environment. Using panel data for 49 countries over a 24-year period, the analysis uses a simple probit approach to show that, indeed, a sustainable debt profile and a sound external position, accompanied by a favorable global liquidity environment, are key factors in affecting the likelihood a sovereign reaccesses international capital markets.Sovereign debt;Developing countries;capital markets, debt service, international capital markets, international capital, global liquidity, current account, access to international capital, access to international capital markets, current account balance, short term debt, current account deficit, debt reduction, foreign debt, bond issues, current account balances, budget balance, international lending, debt crisis, currency debt, access to capital markets, sovereign bond, external obligations, debt stock, current account deficits, capital market, debt ratios, foreign currency debt, private creditors, sovereign debt crises, debt restructuring, external financing, central bank, domestic capital, budget balances, creditworthy borrowers, debt problems, debt sustainability, sovereign borrower, private investors, debt ratio, public debt, debt crises, domestic capital market, sovereign defaults, short-term debt, external debt, moral hazard, long-term debt, brady bonds