DP273 Foreign Lending in the Interwar Years: The Bondholders' Perspective
|Author(s):||Barry Eichengreen, Richard Portes|
|Publication Date:||September 1988|
|Keyword(s):||Foreign Bonds, International Debt, Sovereign Borrowing|
|JEL(s):||041, 433, 441|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=273|
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.