Default
in sentence
1154 examples of Default in a sentence
It should be recognized that a disorderly
default
or exit from the eurozone, even by a small country like Greece, would precipitate a banking crisis comparable to the one that caused the Great Depression.
The euro crisis had its origin in German Chancellor Angela Merkel’s decision, taken in the aftermath of Lehman Brothers’
default
in September 2008, that the guarantee against further defaults should come not from the European Union, but from each country separately.
Something started to cause investors to fear that Greek debt had a slightly higher risk of eventual
default.
But Mario Monti, the economist called to lead a technocratic government in the fall of 2011 and stave off a debt default, barely crossed the electoral threshold required to enter Parliament.
(Indeed, by most accounts, it is about to default.)
Some, like Greece, face such a parlous situation that it is difficult to imagine any outcome other than a traumatic
default
and further economic turmoil; and Greece is unlikely to be the only Western economy forced to restructure its debt.
Trump recently suggested that the US should negotiate with its creditors to buy back much of its debt at a discount – in effect, a partial
default
on trillions of dollars of liabilities, intended to reduce the burden of debt service for taxpayers.
Even the hint of a
default
would jeopardize the government’s credit rating and raise the cost of future borrowing.
Who would consider the dollar a safe haven if a partial
default
seems imminent?
Yet just waiting for North Korea to collapse is a regime-change strategy by
default
– and the cost of a chaotic or violent collapse could be frighteningly high.
But a tariff would eventually be overturned by the World Trade Organization, and a
default
on US debt would be even more reckless.
Indeed, without the single currency, many of these countries would have succumbed to a downward spiral of devaluation, default, and recourse to the IMF.
The recent “stress tests” of European banks were blatantly designed as a confidence-building measure rather than a genuine exploration of possible systemic weaknesses – failing, for instance, to include the possibility of
default
on Greek sovereign debt.
And, assuming that there is no surge in inflation or economic growth, the danger of
default
cannot be so easily dismissed.
That goes a long way toward explaining (add a bit of ideology to the mix) why the current Greek government has gone to the brink of
default
before agreeing to restrain public-sector pensions, as its European Union partners demand.
The RMB’s fall against the dollar reflects the slowing of China’s debt-fueled economic growth and the accumulation of
default
risks.
But, because most of those countries had handed over monetary policy to the European Central Bank and could no longer print their own money, there was a heightened risk of
default.
To be sure, the probability of
default
might be lower on a trading book because of the shorter time that the assets are held.
But the scale of total capital erosion in the event of
default
is the same, regardless of whether the asset has been held for a single day on the trading book or an entire decade on the banking book.
How to
Default
on Sovereign DebtITHACA – The financial brinkmanship over Greece’s debts has raised the question of whether (or when) the country will
default.
As Greek officials consider their options, they would do well to bear in mind that there are better and worse ways to
default
on sovereign debt – especially given countries’ desire to reestablish their creditworthiness as soon as possible.
It is hard to know how much harm Argentina’s undiplomatic pronouncements during its
default
saga did to its efforts at navigating the United States’ legal system; what is clear is that its ill-considered official rhetoric did not help its case.
Issuing a statement of regret at the inability to reach a negotiated solution, offering clear short- and long-term plans to manage the default, and outlining a compelling strategy for recovery and growth would be far preferable.
Explain yourself: In the aftermath of a default, it may seem that no one is listening to even the most rational of explanations.
Creditors will likely insist that the
default
was a terrible mistake and argue that recovery is impossible unless the decision is quickly reversed.
A
default
is a concrete demonstration of the limits of a state’s willingness to pay, at least in the short term.
They may accept that a
default
could be part of a policy package designed to improve the country’s economic fundamentals and thus its capacity to repay its debt in the long term.
Repay some debt: It sounds counterintuitive, but countries in
default
should consider paying some of their debts – on their own terms and on a graduated basis – as a way to rebuild creditworthiness.
If the explanation for a
default
includes an assertion that payments should be tied to economic recovery, then it can make sense to specify the conditions for resuming payments – and follow through when the conditions are met.
Even after the Soviet Union’s repudiation of czarist Russia’s debts – perhaps the twentieth century’s most notorious (and most misunderstood) debt
default
– certain creditors expressed interest in lending to the new regime, in part because Soviet agencies repaid debt that they considered legitimate.
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