Sovereign haircuts / DEU
Germany
2 concluded restructurings, between 1938 and 1953. The earliest default they settle began in 1938. The worst cost creditors 51.7% of the present value of their claim, in 1953. The longest gap between a default and its settlement was 14 years.
Every restructuring
Two measures of the same deals, never combined. The present-value haircut discounts what creditors got against what they were owed; the face-value reduction counts only principal written off.
| Default | Settled | Years to settle | Present-value haircut | Face-value reduction | Debt treated (2020 $) | Source |
|---|---|---|---|---|---|---|
| 1938 | 1938 | 0 | 24.0% | 0.0% | $1.98B | Meyer, Reinhart and Trebesch (2022) |
| 1939 | 1953 | 14 | 51.7% | 19.8% | $7.62B | Meyer, Reinhart and Trebesch (2022) |
Source: Meyer, Reinhart & Trebesch (2022), Sovereign Bonds since Waterloo | Cruces & Trebesch (2013), Sovereign Defaults: The Price of Haircuts | Asonuma & Trebesch (2016) Debt treated is the amount restructured, deflated to constant 2020 US dollars in the source file. A negative haircut means the new instruments were worth more than the old claim. Methodology
Bond prices
2 of 2 Germany restructuring episodes have Waterloo prices during the restructuring interval
price only, never pbid or pask, and shows one line per bond from one year before default to one year after settlement. The author README defines price as “bond price in GBP and USD”; it does not document normalization to face value. Across all 329 haircut episodes, 111 have no Waterloo country-code match and 177 start after Dec 1, 1980. Those two counts overlap.| Bond | Currency | ISIN | Obs. | First | Last |
|---|---|---|---|---|---|
| 5.5% (7) External Sterling Loan of 1924, due 1949 (Dawes Bonds) | GBP | not recorded | 204 | Jan 1, 1938 | Dec 1, 1954 |
| 5% (5.5) Sterling International Loan of 1930, due 1965 (Young Loan) | GBP | not recorded | 203 | Jan 1, 1938 | Dec 1, 1954 |
| 3% German Funding Bonds of 1953, due 1972 (Dawes Bonds) | GBP | not recorded | 8 | May 1, 1954 | Dec 1, 1954 |
| 3% German Funding Bonds of 1953, due 1972 (Young Loan) | GBP | not recorded | 8 | May 1, 1954 | Dec 1, 1954 |
| 5.5% External Loan of 1930, due 1965 (International Loan) | USD | not recorded | 60 | Jan 1, 1938 | Dec 1, 1954 |
| 7% External Loan of 1924, due 1949 (Dawes Bonds) | USD | not recorded | 60 | Jan 1, 1938 | Dec 1, 1954 |
| 3% German Funding Bonds of 1953, due 1972 (Dawes Bonds) | USD | not recorded | 12 | Jan 1, 1954 | Dec 1, 1954 |
| 3% German Funding Bonds of 1953, due 1972 (Young Loan) | USD | not recorded | 12 | Jan 1, 1954 | Dec 1, 1954 |
waterloo_bonds.price only; pbid and pask are not averaged into it. The author README defines price as “bond price in GBP and USD” and does not document face-value normalization. GBP and USD observations use separate labelled panels and y-axes. Of the 329 episodes in the haircut file, 111 have no Waterloo country-code match and 177 start after 1980-12-01; these counts overlap. Later episodes show an absence message rather than an implied zero.Source: Meyer, Reinhart & Trebesch, Sovereign Bonds since Waterloo (bond-price panel) | Harvard Dataverse, Sovereign Bonds since Waterloo Methodology
Default spells
| Spell | From | To | Years | Restructurings |
|---|---|---|---|---|
| DEU_1938-1953 | 1938 | 1953 | 16 | 2 |
Source: Meyer, Reinhart & Trebesch (2022), Sovereign Bonds since Waterloo | Cruces & Trebesch (2013), Sovereign Defaults: The Price of Haircuts | Asonuma & Trebesch (2016) Duration counts both endpoints. The spells table also carries a cumulative-haircut column; it is not published here because it does not reconcile with the per-episode haircuts, see the methodology. Methodology
Debt still in default
The Bank of Canada-Bank of England default database records no debt in default for Germany in its latest year.
Source: Bank of Canada-Bank of England Sovereign Default Database (CRAG) Bank of Canada terms (attribution). Includes domestic arrears, so it is not comparable with the debt-treated column above. Methodology