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The purpose of the UDROP proposal is to prevent debt rollover crises for foreign-currency-enominated debt instruments. For such liabilities, there is no international analogue to the domestic lender of last resort or to domestic deposit insurance. UDROP stands for Universal Debt Rollover Option with a Penalty. Our proposal is that all foreign currency… (More)
** The views here are those of the authors and do not necessarily represent those of the Bank of England or of the other members of its Monetary Policy Committee. We thank two anonymous referees, participants of a seminar at De Nederlandsche Bank for helpful comments.
The opinions expressed are those of the authors only. They do not necessarily represent those of the Bank of England or of the other members of its Monetary Policy Committee. We would like to thank two anonymous referees, as well as (of ABN Amro Bank), and the other seminar participants for helpful comments. Special thanks are due to Bert van Selm… (More)