An International Monetary Fund paper published on Wednesday says countries can reduce the risk of default from a debt restructuring by setting a minimum threshold on creditor participation.

Ran Bi, Marcos Chamon and Jeromin Zettelmeyer, the paper's authors, present a model that rationalises the initial fears and offers interpretations for why debt renegotiations do not materialise.

The authors say that as emerging market countries began to experience difficulties in servicing their public debt