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This chapter explores why a better alternative to current practises in addressing sovereign debt repayment problems has not emerged. It examines the discussions on financing and debt repayment difficulties from the first United Nations Conference on Trade and Development in 1964 to the eve of the 1980s debt crisis. Drawing from recent work that highlights the ways with which the power of economics and economists operates in the public realm, the chapter examines the role of economic analysis within the political debate on debt. The chapter details the repeated refusals by creditor groups to any suggestion for improvements to the international debt architecture.

This paper seeks to describe a new service developed by national debt charity Consumer Credit Counselling Service (CCCS) aimed at identifying clients within its online debt counselling tool who may be suffering from stress and anxiety and then referring them for advice and support, including computer‐based cognitive behavioural therapy (CCBT).

Since December 2010, clients using CCCS Debt Remedy, the charity's online debt counselling tool, have been asked four trigger questions which indicate whether the user is suffering from depression and/or anxiety. Clients who show these signs, after they receive a recommendation about how to deal with their debt, are offered the opportunity to complete a more comprehensive assessment known as CCCS Wellbeing. The CCCS Wellbeing assessment consists of 16 questions, nine relating to depression and seven to anxiety. The depression questions are based on the medically endorsed depression screener, PHQ‐9, and the anxiety questions are based on the similarly medically endorsed anxiety screener, GAD‐7. These two screeners are also the source of the four original trigger questions.

Of the 36,618 clients who were counselled by CCCS Debt Remedy between the launch of the new service in December 2010 and the end of May 2011, 65 percent obtained a recommendation to undertake CCCS Wellbeing. The vast majority of clients who obtained a CCCS Wellbeing recommendation through the online debt counselling tool were showing signs of both depression and anxiety (74 percent).

The high propensity for people to be recommended to CCCS Wellbeing demonstrates the need for the service. This will inform future service development by CCCS, which is studying new ways to further identify and refer for help its clients who are struggling with their mental health.

In the wake of the financial crisis and ensuing recession, there has been a substantial increase in the number of individuals and households unable to meet their financial commitments, especially in London, UK. This growth in personal debt problems has significant implications for individual health and the associated need for NHS care. There is growing evidence that financial problems are associated with stress‐related ill health, both mental and physical. This ar ticle summarises the London Health Forum's repor t on the relationship between personal debt and health in London and reviews other studies that have carried out research on health and debt.

Debt‐equity swaps represent a new market‐based mechanism, by which debtor countries and creditor banks can defuse the acute problems associated with the international debt crisis. This paper describes, analyzes and evaluates debt‐equity swaps from the standpoint of the debtor country. It also discusses some of the possible advantages and disadvantages for LDCs that might contemplate the use of such swaps. The paper demonstrates how a successful debt‐equity swap program could play an important role in alleviating the IDCs' debt problem as well as contributing to their future economic growth.

The financial policies of the modern world corporations and their investment decisions are generally considered as interrelated because the agency problems, associated with the debt level and its maturity structure, give rise to incentives for overinvestment or underinvestment. The present study empirically investigates the linkage between debt maturity structure and firm investment in a financially constrained environment, using Pakistan as a case study, to determine how the institutional environment in which firms operate affect these decisions and their linkage.

The empirical analysis is carried in a panel data setting using panel regression models as the baseline methods. Moreover, generalized methods of moments (GMM) estimators are used, coupled with the instrumental variables approach, for robustness and improving the efficiency and consistency of estimates.

Results suggest that firms rely more on short financing in Pakistan. Thus, given the capital structure which is characterized by higher proportion of short-term financing, the higher level of leverage is less likely to cause underinvestment problem. However, the underinvestment problem do persists in the firms that have higher portion of long-term debt. These findings imply that the debt-overhang problem may persist even in the financially constrained environments where attractive investment opportunities are limited, and long-term financing is difficult to acquire.

This study contributes to the literature by revealing how corporate investment and financing decisions and their linkage is influenced by the institutional environment of the less developed countries which is characterized by underdeveloped financial markets, inefficient legal system and weak investor protection system.

Our aim is to analyze the type of lender and the debt maturity of Chilean firms as a function of their ownership structure and their growth opportunities. We perform the empirical analysis using an unbalanced panel data of 169 firms from 1990 to 2001. Our results show that Chilean firms with growth opportunities, ownership concentration, and a need for external funds issue short‐term bank debt to finance their new investments. This financing source is an efficient mechanism in Chile to alleviate agency and asymmetric information problems. The Chilean institutional environment influences firms’ decisions on banking debt.

The purpose of this paper is to determine whether bank debt‐maturity decisions are conditioned by growth opportunities, the firms’ ownership structure, or the institutional environment.

The empirical analysis is undertaken using an unbalanced panel data of Chilean and Spanish firms.

The results indicate that when banks are not allowed to become stockholders, managers use bank debt‐maturity as a corporate governance mechanism. When banks can participate in the ownership of the firms that they finance, short‐term bank debt can serve as a substitute for a governance mechanism.

The main contribution of this paper is the analysis of how differences in financial development among countries modify financial decisions by firms.

This paper aims to examine the nexus between hedging, which reduces the volatility of corporate assets, and the anomaly of debt overhang, whereby corporate management is motivated to reject positive net present value (NPV) projects. The question of whether hedging ameliorates or aggravates debt overhang is addressed.

The Black–Scholes isomorphism between common shares and call options is exploited to determine the allocation of a project’s NPV between debt- and stock-holders. The effect of hedging on this NPV-partitioning is then gauged to determine the resulting likelihood of debt overhang.

If the volatility of corporate assets is below a critical maximum, hedging ameliorates debt overhang consistent with extant theoretical research. However, above that critical value of volatility, hedging aggravates debt overhang.

The novel result of this note, namely, hedging may exacerbate debt overhang, is demonstrated both analytically and intuitively. The latter is explained by allusion to a second agency-theoretic conflict between debt- versus stock-holders, namely, risk shifting. The disparate effects of hedging on debt overhang imply a non-monotonic relationship between metrics for these two variables, which is a phenomenon that extant empirical studies have failed to take into account.

The Covid-19 pandemic has rekindled interest in sovereign debt crises amidst calls for debt relief for developing and emerging countries. But has debt relief lessened the debt burdens of emerging and developing economies? The purpose of this paper is to empirically address this question. In particular, the focus is on the implications of debt relief and institutional qualities for sovereign debt in emerging and developing economies.

The model extends the framework on the probability of default by incorporating the receipt of debt relief by a debtor country. Doing so allows to better explain movements of sovereign defaults relating to debt relief. The model is estimated via the regular probit regression.

The analysis shows that the debt relief provided, thus, far, failed to ease the debt overhang problems of developing and emerging countries and reduced investment. The current debt relief schemes may underscore the prospects of self-enforcing and self-fulfilling sovereign debt crises rather than eliminating the dilemma completely. Regarding the forms of debt relief, the analysis shows that debt forgiveness offers favourable prospects in terms of debt sustainability and economic outcomes than debt rescheduling. Perhaps, the sovereign debt crises, particularly in low-income countries, hinge on insolvency problems rather than transitory illiquidity issues.

Any debt relief mechanism should consider seriously the potential incentive effect that reinforces expectations of future debt-relief initiatives. Importantly, solving the sovereign debt problem requires a programme for sustained investment and economic growth, while not discounting the critical role of prudent debt management policies and institutions.

This study contributes a different angle to the debate on sovereign debt distress. Aside from the structural and economic factors, this study investigates the role of debt management policy in the debtor nation and the implications of debt relief benefits for sovereign risk. The framework also focuses on whether the different forms of debt relief exert distinctive impacts.

The purpose of this paper is to evaluate the evidence on the extent to which personal debt impacts on mental health, and mental health on personal debt.

The paper systematically reviews the English‐language, peer‐reviewed literature, 1980‐2009, drawing on 14 databases across the medical, business, legal, and social science fields.

From 39,333 potential papers identified, 39,283 were excluded, and 50 were reviewed using a narrative analysis approach. Among nine longitudinal studies, three controlled for psychiatric morbidity or psychological wellbeing at baseline, income/wealth, and other socio‐economic variables. From these, two reported indebtedness or an increase in debt levels associated with subsequently poorer mental health, while one study found no such relationship. While methodological limitations make it difficult to definitively demonstrate whether indebtedness causes poorer mental health, plausible data exist which indicate that indebtedness may contribute to the development of mental health problems, and mediate accepted relationships between poverty, low income, and mental disorder.

Existing research either uses definitions of “debt” which lack specificity, or definitions of “mental health” which are too broad‐brushed. A more sensitive set of core questions is needed. Further longitudinal research is also a key priority.

Those working with people with debt problems need to be aware of the potential risk of reduced mental wellbeing or mental disorder.

The mental health of individuals living with indebtedness has become a recent concern for the health and financial services sectors. However, no systematic reviews have so far been conducted.