In Good Times Prepare for Crisis: Lessons from the history of debt crises

Amidst ongoing concern that another debt crisis may loom for several emerging market countries, the Global Economy and Development program at Brookings is hosting the D.C. launch of “In Good Times Prepare for Crisis – From the Great Depression to the Great Recession: Sovereign Debt Crises and Their Resolution.” Authored by Ira Lieberman, a financial sector expert who helped resolve financial crises in Mexico, East Asia, Turkey, and Argentina and who was involved in crisis resolution in several European countries, the book outlines the modern history of sovereign debt crises.

Too often, efforts to end debt crises have been little more than a palliative, and the debt overhang from one crisis contributes to the next, as seen until recently in Greece. Both private and sovereign debt have increased substantially since the 2008 crisis, with inadequate deleveraging. This debt overhang leaves countries vulnerable and with limited maneuverability to address the next crisis.

A panel of experts reflected on how lessons from past crises can help bankers, policymakers, and others resolve future crises with the least possible damage. A question and answer session, along with a book signing, followed.