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Default in sentence

1154 examples of Default in a sentence

No one can imagine that a country with so many unique economic advantages would risk such a damaging self-inflicted wound as default would cause.
In the past, it was Obama who blinked, knowing that even if a catastrophic debt default was largely caused by congressional Republicans, he would likely absorb some of the blame in the next election.
Unfortunately, a US debt default, even a technical one, would have unforeseeable consequences that could threaten the recovery.
If the mere suggestion of monetary tightening roils international markets to such an extent, what would a US debt default do to the global economy?
Yes, the dollar would remain the world’s main reserve currency even after a gratuitous bout of default; there is simply no good alternative yet – certainly not today’s euro.
But an unforced debt default now could dramatically accelerate the process, costing Americans hundreds of billions of dollars in higher interest payments on public and private debt over the coming decades.
Indeed, if Southern European countries had kept their own currencies, they might never have dug as big a debt hole, and would have had the option of partial default through inflation.
If borrowers default on their off-balance-sheet loans, banks might choose to protect their reputations by covering the difference using internal funds, thereby transferring the risk onto their balance sheets and increasing the NPL ratio.
Moreover, once a loan is securitized, the bank that issued it no longer has any incentive to ensure repayment by the borrower, which raises the risk of default and drives up interest rates.
In order to mollify investors in the face of increased default risk, China’s government might force commercial banks to strengthen their balance sheets through collateralization or to swap defaulted loans for new bonds, backed by China’s foreign reserves held in US Treasuries.
It is hard today for America (and, until recently, the world) to imagine a US default, because there has been no strong reason to fear one since the 1790’s.
For example, in deciding how their pension savings will be allocated, most people simply choose the default option in their employer-offered plan.
Often, the default option is unsuitable for most individuals – for instance, it typically allocates all savings to low-return money-market funds.
Sunstein and Thaler would have the employer choose a default option that works for most people, such as 60% in equities, 30% in bonds, and 10% in money-market funds.
The libertarian part is that the employee has the right to opt out of the default option.
Because people rarely move away from the default option, the employer’s paternalistic choice prevails, and we get libertarian paternalism.
One response is to point out that most plans already have a default option that determines savings allocations.
Sunstein and Thaler merely say that the default option should be set in a way that is good for people, and clearly they have an idea of what is good.
In choosing the default option, the government or the employer nudges all employees into prevailing fads such as “buy equity for the long run.”
This, they believe, is better than the current typical default option of putting individuals’ money into money-market funds.
What if there were no default option, and individuals were sent repeated, and increasingly urgent, reminders to choose an allocation if they did not choose one already.
The conventional wisdom could be offered as a recommendation, along with explanations of why it makes sense, but it would not be the default.
Markets are just moving towards a new equilibrium with higher interest-rate spreads, which reflect the higher default risk of some European countries – a bit like in pre-euro times, though much less extreme.
In Europe, by contrast, there is almost no aggregate shield and almost no automatic support for member states in trouble – better-off states simply extend a conditional helping hand to prevent default.
In the US, this right-wing resurgence, whose adherents evidently seek to repeal the basic laws of math and economics, is threatening to force a default on the national debt.
This leaves open the question of which expenditures get priority – and if expenditures to pay interest on the national debt do not, a default is inevitable.
On the contrary, the Target system is essentially a collective insurance scheme: if a national central bank were to default, the loss would be shared among all ECB shareholders.
In September 2003, Argentina did the unthinkable: a temporary default to the IMF itself.
European Central Bank President Mario Draghi’s vow to do “whatever it takes” to prevent a sovereign default in the eurozone seems to have diminished that danger – at least for now.
Recently, Venezuela’s despotic socialist government has been so desperate to avoid another default (which would be the country’s 11th since independence) that it mortgaged its industrial crown jewels, including the United States-based refiner Citgo, to the Russians and the Chinese.
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