Study on default risks in emerging markets from the US and China

The U.S. and China are discussing new measures to stem a wave of defaults in emerging markets, according to people familiar with the matter. The talks, which include extending loan maturities before countries default, are aimed at both easing the $400 billion annual debt service burden for poor countries and finding alternatives to the high borrowing rates these countries currently face in the market. In addition to extending repayment periods, other ideas being discussed include increasing financing from the World Bank and other multilateral banks. The key is to get those measures in place before countries default and begin restructuring talks. Any joint proposal from Washington and Beijing would likely need the support of all G20 members, as well as the International Monetary Fund and the World Bank.