In the book This Time Is Different, by Reinhart and Rogoff, in chapter 8, the authors state that
- Higher minimum level of reserves (?)
- And/or upper bound/ceiling to interest rates ( will help increase real inflation rate... however, isn't the nominal rate that which matters most for defaults?)
coupled with surges in inflation were, at certain historical moments, used to default on sovereign debt.
I understand how inflation can be used to 'default' on debt, but I'm not getting how the financial measures stated above would help...