The external debt overhang problem as a threat to global financial security

The aim of the study is to analyze the external debt’s level in countries all over the world and to indicate that credibility is one of the most important factors which limit countries’ access to external financing, its cost and determine vulnerability of those countries to shocks. On the basis of the analysis of statistic data an international comparison was made with the use of the inductive reasoning methodology. The study also overviews the threats triggered by the external debt overhang issue, not only in the case of indebted countries but also for financial security of global economy. According to International Monetary Fund (IMF) data, global debt of the nonfinancial sector at the end of 2015 reached USD 1521 trillion (which is 225% of world GDP2), where 2/3 comes from private sector debt. Even though it is stressed that public debt is not