Sovereign haircuts / ITA
Italy
One concluded restructuring, settled in 1947. It cost creditors 85.7% of the present value of their claim, 7 years after the default that began in 1940.
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 |
|---|---|---|---|---|---|---|
| 1940 | 1947 | 7 | 85.7% | 5.0% | $284M | 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
1 of 1 Italy restructuring episode has 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 |
|---|---|---|---|---|---|
| 7% SF Gold Bonds of 1927, due 1937 (series A)(Credit Consortium for Public Works) | GBP | not recorded | 37 | Sep 1, 1945 | Sep 1, 1948 |
| External 7% Gold Loan of 1925, due 1951 | USD | not recorded | 49 | Jan 1, 1939 | Dec 1, 1948 |
| External SF 1-3% of 1947, due 1977 | USD | not recorded | 13 | Dec 1, 1947 | Dec 1, 1948 |
| Italian Credit Consortium for Public Works External Secured SF 1-3% of 1947, due 1977 | USD | not recorded | 13 | Dec 1, 1947 | Dec 1, 1948 |
| Italian Credit Consortium for Public Works External Secured SF Gold 7%, of 1927, due 1947 (series B) | USD | not recorded | 13 | Dec 1, 1947 | Dec 1, 1948 |
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 |
|---|---|---|---|---|
| ITA_1940-1947 | 1940 | 1947 | 8 | 1 |
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 Italy 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