scholarly journals Governing Sovereign Debt Restructuring Through Regulatory Standards

2015 ◽  
Vol 6 (2) ◽  
Author(s):  
Skylar Brooks ◽  
Domenico Lombardi
Keyword(s):  
Financial Stability ◽  
Sovereign Debt ◽  
Soft Law ◽  
Debt Restructuring ◽  
The Core ◽  
Hard Law ◽  
Regulatory Standards ◽  
Debt Crises ◽  
Further Development ◽  
The International Monetary Fund

AbstractIn recent years, a number of costly and destabilizing sovereign debt crises – from Argentina and Greece to Ukraine – have served as a forceful reminder that the international community lacks an agreed-upon framework for resolving debt crises and, when necessary, restructuring sovereign debt in a timely, orderly, and equitable manner. To help address this apparent governance gap, the paper argues that there is an important but underutilized role for the Financial Stability Board (FSB) in governing sovereign debt restructuring. More specifically, in a governance domain that is relatively fragmented between uncoordinated, even sometimes competing, rules and rule-makers, the FSB could serve as the focal institution responsible for overseeing the coordination and further development of soft law regulatory standards for sovereign debt restructuring. The reasons for FSB governance in this domain are simple and compelling, relating to both the nature of the debt restructuring regime and its evolution to date, as well as the specific institutional features of the FSB and the core tasks it performs. Although there remains room for treaty-based organizations like the International Monetary Fund (IMF) and United Nations (UN) to develop a hard law approach to sovereign debt restructuring, the FSB, we argue, is best positioned to strengthen and oversee the existing soft law approach, which currently prevails as the modus operandi of the present debt restructuring framework.

Greek Debt Restructuring Case

2021 ◽  
Vol 195 ◽  
pp. 227-238
Keyword(s):  
International Law ◽  
Financial Stability ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Secondary Market ◽  
Federal Republic Of Germany ◽  
Debt Restructuring ◽  
Content Type ◽  
State Immunity ◽  
Basic Law

227State immunity — Jurisdictional immunity — Exceptions — Acta jure gestionis — Acta jure imperii — Once a trader always a trader — State of emergency — Law-making — Legislature regulating legal relations initially established by acta jure gestionis qualifying as acta jure imperiiEconomics, trade and finance — European Monetary Union — Hellenic Republic — Public debt — Bonds — Greek sovereign debt crisis — Sovereign debt restructuring — Collective Action Clauses — Secondary market — Bond exchange — Financial stabilityRelationship of international law and municipal law — Compatibility with Basic Law of the Federal Republic of Germany — General principle of international law — Article 25 of German Basic Law — Right to a lawful judge — The law of Germany

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 Towards an International Code for administrative cooperation in tax matter and international tax governance

2017 ◽  
pp. 45-85 ◽  
Author(s):  
Eva Andrés Aucejo
Keyword(s):  
Tax Compliance ◽  
The United States ◽  
Soft Law ◽  
International Governance ◽  
European Organization ◽  
Practical Applications ◽  
Hard Law ◽  
The World ◽  
International Tax ◽  
The International Monetary Fund

There is not a “Global Code” that encodes the duty of cooperation between tax authorities in the world, concerning the global tax system. This article addresses this issue by proposing a global Code of administrative cooperation in tax matters including both tax relations: between States, and between States, taxpayers and intermediary’s agents. It follows a wide concept of tax governance. The findings of this research have highlighted several practical applications for future practice. article analyses, firstly, the State of the question, starting with the legal sources (international and European sources of hard law and soft law) reviewing the differences with the Code as here proposed. It also examines some important Agents who emit relevant normative in international administrative tax cooperation and the role that these agents are developing nowadays (sometimes international organizations but also States like the United States, which Congress enacted the Foreign Account Tax Compliance Act, FATCA). Overlapping and gaps between different regulations are underlined. Finally, the consequences of this “General Code” lack for the functioning of a good international governance, are described. Hence, the need to create an International Cooperation Code on tax matters and international fiscal governance is concluded. That Code could be proposed by any International Organization as the World Bank nature, for instance, or the International Monetary Fund or whichever International or European Organization. This instrument could be documented through a multilateral instrument (soft law), to be signed by the States to become an international legal source (hard law). Filling this Code as Articulated Text (form) could be very useful for the International Community towards an International Tax Governance.

Book Reviews

2016 ◽  
Vol 54 (4) ◽  
pp. 1399-1401
Keyword(s):  
Sovereign Debt ◽  
Columbia University ◽  
Debt Restructuring ◽  
Formal Framework ◽  
Contractual Approach ◽  
Debt Crises ◽  
Specific Implementation ◽  
The University

John O. S. Wilson of the University of St. Andrews reviews “Too Little, Too Late: The Quest to Resolve Sovereign Debt Crises,” edited by Martin Guzman, José Antonio Ocampo, and Joseph E. Stiglitz. The Econlit abstract of this book begins: “Fifteen papers, most originally presented at the conference 'Frameworks for Sovereign Debt Restructuring' held at Columbia University in November 2014, examine general issues and goals of debt restructuring as well as the deficiencies of the current nonsystem, focusing on an analysis of the resolution of Argentina's and Greece's debt crises, possible improvements in the contractual approach, and specific implementation proposals for a multinational formal framework.”

Reviving Troubled Economies

2003 ◽  
Vol 17 (2) ◽  
pp. 10-17
Author(s):  
Jack Boorman
Keyword(s):  
International Monetary Fund ◽  
Sovereign Debt ◽  
The Other ◽  
Major Goal ◽  
Debt Restructuring ◽  
General Proposition ◽  
The International Monetary Fund

There would be few dissenters from the general proposition that we should try to deal justly with debt. We have all watched in horror the collapse that has taken place in Argentina and the enormous cost paid by so many people in that country—as well as by the creditors of Argentina—from the massive financial and economic dislocation and disruption. I do not believe that what has occurred was inevitable.Unfortunately, some who address this issue of dealing with unmanageable debt situations have offered advice that, while emotionally appealing, is not operationally helpful. I will describe and justify the rationale and design of the proposal put forward by the International Monetary Fund for a Sovereign Debt Restructuring Mechanism (SDRM). Its major goal is to help reduce the unacceptably large costs associated with disorderly defaults by sovereign governments whose debt burdens have become unsustainable. The SDRM aims to get the countries' debts to sustainable positions and deal with the broader needs of the countries through the full array of aid and other mechanisms that are available— and, indeed, to enlarge and enhance these initiatives. I will also explain my misgivings about some of the other proposals, including the ones coming from the NGO community.

scholarly journals Sovereign Debt Restructurings

2021 ◽  
Vol 13 (2) ◽  
pp. 26-77
Author(s):  
Maximiliano Dvorkin ◽  
Juan M. Sánchez ◽  
Horacio Sapriza ◽  
Emircan Yurdagul
Keyword(s):  
Economic Theory ◽  
Discrete Choice ◽  
Sovereign Debt ◽  
Decision Rules ◽  
Dynamic Discrete Choice ◽  
Debt Restructuring ◽  
Book Value ◽  
Regulatory Costs ◽  
Debt Crises ◽  
Debt Dilution

Sovereign debt crises involve debt restructurings characterized by a mix of face value haircuts and maturity extensions. The prevalence of maturity extensions has been hard to reconcile with economic theory. We develop a model of endogenous debt restructuring that captures key facts of sovereign debt and restructuring episodes. While debt dilution pushes for negative maturity extensions, three factors are important in overcoming the effects of dilution and generating maturity extensions upon restructurings: income recovery after default, credit exclusion after restructuring, and regulatory costs of book value haircuts. We employ dynamic discrete choice methods that allow for smoother decision rules, rendering the problem tractable. (JEL E44, F34, F41, H63)

scholarly journals Sovereign Debt Restructuring: A Model-Law Approach

2015 ◽  
Vol 6 (2) ◽  
Author(s):  
Steven L. Schwarcz
Keyword(s):  
United Nations ◽  
International Monetary Fund ◽  
Sovereign Debt ◽  
The Political ◽  
International Treaties ◽  
Debt Contracts ◽  
Debt Restructuring ◽  
Ability To Pay ◽  
Model Law ◽  
The International Monetary Fund

AbstractUnlike individuals and corporations, countries indebted beyond their ability to pay cannot use bankruptcy laws to restructure unsustainable debt. The United Nations and the International Monetary Fund have attempted to propose treaties to enable that debt restructuring, but the political difficulties of reaching a worldwide consensus have stymied their efforts. This article argues that a model-law approach to restructuring unsustainable sovereign debt should be feasible and effective because the vast majority of sovereign debt contracts are governed by the laws of either the debtor-state or two other jurisdictions. Those jurisdictions individually could enact a model law to give struggling nations a real prospect of equitably restructuring their debt to sustainable levels. By enabling such debt restructuring, that enactment would also help to foster the norms required to facilitate the development of international treaties.

Why Venezuela’s Debt Restructuring Is More Challenging than Past Restructurings

2018 ◽  
Keyword(s):  
Economic Crisis ◽  
Sovereign Debt ◽  
Economic Data ◽  
Debt Restructuring ◽  
Sovereign Bond ◽  
Key Features ◽  
Debt Crises ◽  
The Government ◽  
Interest Payments

Venezuela’s debt restructuring could be the fourth-largest sovereign restructuring in history. The country’s default was triggered by missed interest payments on both government and Petroleos de Venezuela S.A. (PDVSA) bonds in November 2017. Shortly thereafter, the government announced its intention to restructure its debt. This article compares Venezuela’s crisis with prior sovereign bond defaults and argues that several key features will make restructuring Venezuela’s debt more complex and likely more protracted than in past sovereign debt crises, with likely larger-than-average losses experienced by bondholders. These include Venezuela’s heavy annual debt maturities through the next decade, the interdependence of government and PDVSA finances, the extent of the economic crisis in the country, elevated sociopolitical tensions, lack of transparency on economic data, and U.S. sanctions imposed on Venezuela.

The Politics of Regulatory Design in the Sovereign Debt Restructuring Regime

2019 ◽  
Vol 25 (3) ◽  
pp. 393-417 ◽  
Author(s):  
Skylar Brooks
Keyword(s):  
United States ◽  
Sovereign Debt ◽  
Institutional Design ◽  
The United States ◽  
The Other ◽  
Major Influence ◽  
The Political ◽  
Reform Initiatives ◽  
Debt Restructuring ◽  
Hard Law

Abstract This article looks at two recent initiatives aimed at improving sovereign debt restructuring processes and asks why one initiative succeeded while the other failed. It argues that the success or failure of a reform initiative in the debt restructuring regime depends primarily on the legal-institutional design of the mechanism it is advancing. Hard law mechanisms face enormous political obstacles that make their realization unlikely. Several of these obstacles have been identified by previous studies, but this article highlights additional barriers. It also shows that, in contrast to hard law arrangements, private law contracts provide politically useful mechanisms for regulating debt restructuring, especially for powerful states with major influence over reform outcomes—namely, the United States. The article also argues that the historical legacy of earlier reform initiatives matters, but mainly through its ability to further enhance or diminish the political prospects of mechanisms whose utility has already been determined by their design features.

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