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What is Sovereign Debt?

When Edward III of England ran out of money to finance the Hundred Years’ War with France, he turned to the banking families of Florence. The loans they gave him were extremely expensive, and when Edward failed to become king of France, he was unable to repay the debt in full. Over the centuries, the sovereign’s debt became sovereign debt: the multitrillion, multinational, multicurrency network of debt obligations that we know today. […]