Banking regulations (such as, risk-based capital framework and reserve requirements) have had the unintended consequence of incentivizing banks to hold more sovereign debt on their balance sheets than suggested by their strategic motives. As a result, bank stability now depends more heavily than...

This study investigates the reaction of stock prices to sovereign debt restructurings and credit rating reviews in six frontier stock markets. The study uses the event study methodology corrected for the impact of thin trading to investigate stock market reaction to sovereign debt restructurings...