Authors’ study of the interwar period shows how external sovereign debts can play an aggravating role in global financial cycles, especially when they represent the nodes of a complex financial web. As with the global crisis of 2008 and the euro area crisis of 2010, loss of investor confidence, sovereign debt market disruptions led by liquidity drought, and government intervention in the financial sector added to the external debt burden. Thus, the interwar period offers a telling lens not only for understanding the 2008 crisis, but also for identifying and interpreting present-day vulnerabilities.[…]