Issuing “foreign-law” debt can cut costs in times of crisis – ECB paper

Bonds performance

Governments that issue debt in foreign jurisdictions can reduce the costs they face in crises, a working paper published by the European Central Bank finds.

In Foreign-law bonds: can they reduce sovereign borrowing costs?, Marcos Chamon, Julian Schumacher and Christoph Trebesch examine whether there is a “foreign-law premium” on government debt.

The authors look at bonds issued by eurozone governments in both their own and foreign jurisdictions from 2006 to 2013. They compare the changes in

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