Discussion Paper Details

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Title: Foreign Lending in the Interwar Years: The Bondholders' Perspective

Author(s): Barry Eichengreen and Richard Portes

Publication Date: September 1988

Keyword(s): Foreign Bonds, International Debt and Sovereign Borrowing

Programme Area(s): International Macroeconomics

Abstract: This paper revises and extends our previous (1986) analysis of rates of return on sterling and dollar foreign loans of the 1920s. It analyzes a larger sample of 250 dollar bonds and 125 sterling issues, covering the years 1920-9. Internal rates of return are adjusted for repurchases of discounted foreign bonds. The larger sample confirms the main conclusions of our original study and enables us to paint a richer picture of interwar experience with foreign loans. We also analyze determinants of ex ante spreads on foreign loans relative to risk-free returns, and assess the sophistication of investors.

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Bibliographic Reference

Eichengreen, B and Portes, R. 1988. 'Foreign Lending in the Interwar Years: The Bondholders' Perspective'. London, Centre for Economic Policy Research.