How the Greek debt reorganisation of 2012 changed the rules of sovereign insolvency

Under discussion in this white paper are the 21 features which together represent a new momentum in the way of thinking about sovereign insolvency.

Some of these 21 factors in one way or another, had a precedent in some previous episode, but together they heralded either a novel direction which was unexpected or a dramatic confirmation of the underlying direction of previous trends. Greece did not actually default on its debt. But for reasons explained in more detail in this white paper, Greece was bankrupt in the generic nontechnical sense of the word: the country substantially reduced bondholder claims and needed a huge infusion of bailout cash from the public sector.

Before reviewing the 21 factors, this white paper describes the background and summarises the terms of the Greek transaction.