In particular, the rapid growth in total social financing raises concern about the quality of investment and its impact on repayment capacity.
Excessive penalties lead to negative-sum games, in which the debtor cannot recover and creditors do not benefit from the larger repayment capacity that recovery would entail.
"Strains in the debt repayment capacity of the energy sector may become more evident in Argentina, Brazil, Nigeria and South Africa, as well as in countries reliant on oil revenues, such as Nigeria and Venezuela.
"Strains in the debt repayment capacity of the energy sector may become more evident in Argentina, Brazil, Nigeria and South Africa, as well as in countries reliant on oil revenues, such as Nigeria and Venezuela," he said.
The growth in credit, the I.M.F. said, "raises concerns about the quality of investment and its impact on repayment capacity, especially since a fast-growing share of credit is flowing through less-well supervised parts of the financial system".
We propose, first, a reduction or a write-off on the sovereign officially held Greek debt that is sufficient to ensure that Greece's entire sovereign debt becomes a constant or declining fraction of G.D.P. Second, we call for sizable, front-loaded official financing to ensure that Greece can signal credibly its debt repayment capacity over the medium term.
Last month, the International Monetary Fund cautioned that the growth in credit "raises concerns about the quality of investment and its impact on repayment capacity, especially since a fast-growing share of credit is flowing through less-well supervised parts of the financial system".
Through this social time mechanism, the author expands the meaning of credit and highlights the restriction of repayment capacity and the repayment period on the trading process.
Changes in the unemployment rate cause a contraction or expansion in the reimbursing capacity of households; however, an increase in unemployment reduces the repayment capacity of loans, which raises the default rate.
Together with annual foreign direct investment inflows of about $80 billion and official foreign exchange reserves of $1.5 trillion (the highest in the world), Fitch believes China's external sovereign debt repayment capacity is extremely strong.
