Default
When a borrower fails to make a payment it owes on time.
In plain English
When a borrower fails to make a payment it owes on time.
A default is a broken promise to pay. A company misses a bond payment; a government cannot pay its lenders. Lenders may get back only part of what they are owed, or nothing.
A government default usually hammers its currency and can spread fear to other countries seen as similar, a kind of contagion.
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