Hope springs eternal - French bondholders and the Soviet repudiation (1915-1919)

Kim Oosterlinck, John S. Landon-Lane

Research output: Contribution to journalReview articlepeer-review

24 Scopus citations


Repudiations rarely occur due to their extreme nature. This paper provides an empirical study based on an original database: prices of a Tsarist bond traded in Paris before and after its repudiation by the Soviets. A structural VAR is used to disentangle French market shocks from repudiation specific ones. After the repudiation, we identify shocks that are related with bailouts, hopes of partial bailouts, negotiations with the Soviets and the Russian civil war. We argue that bond prices essentially reflected expected extreme events that never took place and were thus subject to a "Peso problem".

Original languageEnglish (US)
Pages (from-to)507-535
Number of pages29
JournalReview of Finance
Issue number4
StatePublished - Dec 2006

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics


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