restructuring of 2008–2009 to study changes in domestic bank lending behavior. After external debt restructuring, private … dispersion in beliefs across domestic banks, which leads to a misallocation of credit. External debt restructuring eliminates … with the substantial growth in domestic credit upon debt restructuring but also with its independence from the haircut size …

The loans of the IMF, World Bank, and other multilateral development banks (MDBs) are excluded from debt restructuring … status of MDBs, and outline a debt restructuring process that includes MDBs. I also discuss a similar approach by Diwan …, Harnoys-Vannier, and Kessler (2023), which also includes MDBs in debt restructuring but quantifies the benefit in case (a). …