Sovereign Debt Crises

2018 ◽  
pp. 28-44
Author(s):  
Rosa María Lastra ◽  
Vassilis Paliouras
Keyword(s):  
Financial Institutions ◽  
Sovereign Debt ◽  
Debt Relief ◽  
Debt Management ◽  
International Financial Institutions ◽  
Economic Adjustment ◽  
Underlying Causes ◽  
Debt Crises ◽  
Debt Repayment

Creditor responses to sovereign debt crises suggest that they view such crises as problems of debt management on the part of the countries facing debt repayment difficulties. Thus, for example, debt relief and restructuring mechanisms coordinated by the international financial institutions place emphasis on correcting perceived imprudent debt management through a series of economic adjustment measures. Little attention, if any, is paid to addressing the underlying causes of the debt crises. This chapter examines the various causes of sovereign debt crises and the role that debt management plays in their eruption or in addressing them in a sustainable manner.

Sovereign Debt and Human Rights

2018 ◽  
pp. 169-185
Author(s):  
Cephas Lumina
Keyword(s):  
Human Rights ◽  
Financial Institutions ◽  
Sovereign Debt ◽  
Public Services ◽  
Debt Relief ◽  
International Financial Institutions ◽  
International Human Rights ◽  
Physical Infrastructure ◽  
International Human ◽  
The Impact

The ability of States to fulfil their international human rights obligations depends, to a large extent, on the availability and allocation of sufficient resources to essential investments in human, social and physical infrastructure that provide the foundation for sustainable and equitable development, as well as the full realisation of human rights. In many cases, however, excessive sovereign debt burdens and the ensuing costs of servicing or repaying the debt often reduce the amount of resources available to governments for the realisation of human rights. Furthermore, the policy conditions that are typically linked to loans and debt relief provided by international financial institutions often limit investment in and undermine the provision of accessible public services. This chapter seeks to establish the connection between sovereign debt and human rights through a broad discussion of the impact of sovereign debt and related policy conditionalities on the realisation of all human rights.

Debt Crises, Economic Adjustment, and Labour Standards

2018 ◽  
pp. 284-302 ◽  
Author(s):  
Juan Pablo Bohoslavsky ◽  
Franz Christian Ebert
Keyword(s):  
Financial Institutions ◽  
Economic Effects ◽  
International Human Rights Law ◽  
Human Rights Law ◽  
International Financial Institutions ◽  
Labour Law ◽  
Economic Adjustment ◽  
Labour Standards ◽  
The One ◽  
Practical Implications

This chapter examines the relation between economic adjustments, on the one hand, and labour standards, on the other. Section I reviews how labour standard issues have been addressed in different economic adjustment programmes, often initiated at the behest of international financial institutions, or the institutions of what was formerly known as the ‘Troika’. Subsequently, Section II analyses the legal and practical implications thereof. It explains how several labour law reforms required by international financial institutions in the context of economic adjustment have, on a number of occasions, driven countries into violations of international human rights law and international labour law in particular. Section III goes on to examine the economic case of deregulatory labour law reforms in the context of economic adjustment. It shows that the empirical evidence for negative economic effects of labour law in general and in the context of financial and economic crises in particular is at best highly controversial and cannot justify the highly problematic social effects and breaches of international law these reforms have often entailed.

The Devil’s Haircut: Investor–State Disputes over Debt Restructuring

2018 ◽  
Vol 63 (8) ◽  
pp. 1889-1922 ◽  
Author(s):  
Matthew DiGiuseppe ◽  
Patrick E. Shea
Keyword(s):  
Sovereign Debt ◽  
Bargaining Power ◽  
Distributive Politics ◽  
Hurdle Model ◽  
Debt Restructuring ◽  
Double Hurdle Model ◽  
Globalized Economy ◽  
Debt Crises ◽  
Double Hurdle ◽  
Debt Repayment

When do private creditors versus debtor states accept a greater burden in resolving sovereign debt crises? In this study, we argue that distributive politics helps explain the “haircut”—or losses—private creditors take in debt restructuring cases. Despite the expected convergence of partisan policies in a globalized economy, we argue that right and left leaders extract different settlements in debt negotiations. Left governments, representing constituents most likely to be hurt from higher debt repayment, credibly demonstrate more bargaining power and extract greater concessions from creditors. Distributive politics, however, is an indeterminate factor in explaining states entrance into debt negotiations. We use recently released data on the outcome of sovereign debt restructuring cases between states and private creditors from 1975 to 2013 to test our expectations. Results from a double-hurdle model indicate that creditors receive a larger haircut when negotiating with left governments.

scholarly journals EVOLUTION OF CENTRAL BANKS

2020 ◽  
pp. 84-89
Author(s):  
Victoria Dudchenko
Keyword(s):  
Central Bank ◽  
Economic Crisis ◽  
Financial Institutions ◽  
Transformation Method ◽  
Central Banks ◽  
Debt Management ◽  
The European Union ◽  
International Financial Institutions ◽  
Policy Practice ◽  
Bank Institution

Introduction. Throughout the centuries there took place a process of central banks’ development that reflected on the area of target defining, establishing the relationship with government, interconnection with financial market participants, inner management processes. This institute’s evolution from the first bank of issue creation till the modern central bank, including the supranational central bank in the European Union, is characterized by complicated tools of the change of policy, practice, institutional structure, aims and status. Nowadays the next stage of central banks’ development occurs and is characterized by expanding the mandate, reforming the policy, developing innovative aims. This stage is outlined with the global financial and economic crisis and the post-crisis period of the world financial system’s recovery. Under these circumstances, the central banks’ role tends to increase in terms of overcoming the consequences on the global financial and economic crisis that prompts actualizing the issues of integration of unconventional measures in the monetary policy tool, coordination of work of central bank and government concerning debt management, cooperation between the central bank and international financial institutions within the framework of debt management, cooperation between the central banks and international financial institutions within the framework of banking management. Purpose. Generalization of stages and systematization of the causes of emergence, formation and development of a central bank institution through the study of their creation’s evolution and functions’ transformation. Method (methodology). In order to investigate the historical processes, logical sequence of central banks’ development both historical and logical methods of scientific researches were applied. Results. The reasons of central banks’ emergence were generalized, the evolution of central banks’ creation was studied, stages of emergence and development of central banks were further developed and systematized. The peculiarities of the modern stage of central banks’ functioning, role’s change and transformation of functions under the influence of global financial and economic crises.

Three Enforcement Mechanisms

2019 ◽  
pp. 68-82
Author(s):  
Jerome Roos
Keyword(s):  
Financial Institutions ◽  
Sovereign Debt ◽  
Market Discipline ◽  
International Financial Institutions ◽  
Short Term ◽  
Structural Power ◽  
Capitalist Economy ◽  
Credit Lines ◽  
Intermediary Role ◽  
Enforcement Mechanisms

The structural power of finance in sovereign debt crises is a product of the financial sector's position as the principal creator of credit-money within the capitalist economy, and it revolves around its capacity to withhold the short-term credit lines on which all states—as well as firms and households—depend for their reproduction. This chapter discusses the three enforcement mechanisms of debtor compliance through which the structural power of finance is hypothesized to operate, specifying in each case the precise conditions and countervailing forces bearing on their overall strength and effectiveness. These mechanisms are market discipline; the conditional emergency lending by creditor states and international financial institutions; and the intermediary role fulfilled by domestic political and financial elites inside the borrowing countries.

scholarly journals Algeria and the Washington Consensus: Debtor-Creditor Relation Re-Examined

2019 ◽  
Author(s):  
Francesco Saverio Leopardi
Keyword(s):  
Financial Institutions ◽  
Civil Conflict ◽  
Economic Reforms ◽  
Debt Relief ◽  
Washington Consensus ◽  
International Financial Institutions ◽  
Political Analysis

Algeria’s experience with liberal economic reforms occurred while the country faced its worst crisis due to the civil conflict between the army and Islamist insurgents. The study of Algeria’s debt relief process, from loan negotiation to the implementation of adjustment packages, is key to understand how the aid received enabled the Algerian authorities to survive the crisis and renew their patronage networks. Focusing on Algerian relation with International Financial Institutions, this paper provides a political analysis of this process. As a result, the creditors’ favour for stabilisation and their political priorities emerge as factors that increased the leverages of the Algerian authorities.

Sovereign Debt and the Right to Education

2018 ◽  
pp. 233-247
Author(s):  
Ilias Bantekas
Keyword(s):  
Sustainable Development ◽  
Human Rights ◽  
Financial Institutions ◽  
Sovereign Debt ◽  
International Financial Institutions ◽  
Right To Education ◽  
Development Goals ◽  
The Right ◽  
Education And Development ◽  
Developed Nations

The nexus between education and sovereign debt has not always been obvious, although it is not difficult to conceive. This is because the stakeholders involved in debt politics and economics, but particularly its protagonists, namely creditor states and multilateral international financial institutions (IFIs), do not view educational imperatives through a human rights or developmental lens. The chapter demonstrates the inextricable link between the right to education and development and then trace international efforts to entrench the former in developmental agendas, particularly the Millennium Development Goals (MDGs), as more recently transformed into Sustainable Development Goals (SDGs). The object of the chapter is to show that behind the pledges and rhetoric of development finance the reality is that the promotion of the right to education is not high on the agenda of industrialised nations (but equally perhaps on the agendas of least developed nations). We supply numbers-based scenaria in order to demonstrate that most instances of debt servicing, even if combined with debt relief and other forms of co-financing may ultimately fail to comply with the internationally accepted indicators of the right to education.

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