Default: Difference between revisions
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In [[finance]], '''default''' occurs when a debtor has not met his or her legal obligations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant (condition) of the debt contract. A default is the failure to pay back a loan.{{Fact|Didn't find a good definition, copied this from Wikipedia.}} | In [[finance]], '''default''' occurs when a debtor has not met his or her legal obligations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant (condition) of the debt contract. A default is the failure to pay back a loan.{{Fact|Didn't find a good definition, copied this from Wikipedia.}} | ||
==Sovereign debt default== | |||
A sovereign default is defined as the failure of a government to meet a principal or interest payment on the due date (or within the specified grace period). These episodes include instances in which rescheduled debt is ultimately extinguished in terms less favorable than the original obligation.<ref name="Reinhart_Time">Carmen M. Reinhart & Kenneth S. Rogoff. [http://press.princeton.edu/chapters/s8973.pdf This Time Is Different: Eight Centuries of Financial Folly] (pdf), ''Chapter 1'', see also the [http://press.princeton.edu/titles/8973.html summary page]. Referenced 2011-02-17.</ref> | |||
{{Main|Sovereign debt default}} | |||
==References== | |||
{{Reflist}} | |||
==Links== | ==Links== | ||
Latest revision as of 23:08, 16 February 2011
In finance, default occurs when a debtor has not met his or her legal obligations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant (condition) of the debt contract. A default is the failure to pay back a loan.[citation needed]
Sovereign debt default
A sovereign default is defined as the failure of a government to meet a principal or interest payment on the due date (or within the specified grace period). These episodes include instances in which rescheduled debt is ultimately extinguished in terms less favorable than the original obligation.[1]
- Main article: Sovereign debt default
References
- ↑ Carmen M. Reinhart & Kenneth S. Rogoff. This Time Is Different: Eight Centuries of Financial Folly (pdf), Chapter 1, see also the summary page. Referenced 2011-02-17.
Links
- Default on Wikipedia