Martin Guzman, José Antonio Ocampo, and Joseph E. Stiglitz (eds)
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780231179263
- eISBN:
- 9780231542029
- Item type:
- book
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179263.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
The current approach to resolving sovereign debt crises does not work: sovereign debt restructurings come too late and address too little. Though unresolved debt crises impose enormous costs on ...
More
The current approach to resolving sovereign debt crises does not work: sovereign debt restructurings come too late and address too little. Though unresolved debt crises impose enormous costs on societies, many recent restructurings have not been deep enough to provide the conditions for economic recovery (as illustrated by the Greek debt restructuring of 2012). And if the debtor decides not to accept the terms demanded by the creditors, finalizing a restructuring can be slowed by legal challenges (as illustrated by the recent case of Argentina, deemed as “the trial of the century”). A fresh start for distressed debtors is a basic principle of a well-functioning market economy, yet there is no international bankruptcy framework for sovereign debts. While this problem is not new, the United Nations and the global community are now willing to do something about it. Providing guidance for those who intend to take up reform, this book assesses the relative merits of various debt-restructuring proposals, especially in relation to the main deficiencies of the current nonsystem. With contributions by leading academics and practitioners, Too Little, Too Late reflects the overwhelming consensus among specialists on the need to find workable solutions.Less
The current approach to resolving sovereign debt crises does not work: sovereign debt restructurings come too late and address too little. Though unresolved debt crises impose enormous costs on societies, many recent restructurings have not been deep enough to provide the conditions for economic recovery (as illustrated by the Greek debt restructuring of 2012). And if the debtor decides not to accept the terms demanded by the creditors, finalizing a restructuring can be slowed by legal challenges (as illustrated by the recent case of Argentina, deemed as “the trial of the century”). A fresh start for distressed debtors is a basic principle of a well-functioning market economy, yet there is no international bankruptcy framework for sovereign debts. While this problem is not new, the United Nations and the global community are now willing to do something about it. Providing guidance for those who intend to take up reform, this book assesses the relative merits of various debt-restructuring proposals, especially in relation to the main deficiencies of the current nonsystem. With contributions by leading academics and practitioners, Too Little, Too Late reflects the overwhelming consensus among specialists on the need to find workable solutions.
Ranald C. Michie
- Published in print:
- 2001
- Published Online:
- November 2003
- ISBN:
- 9780199242559
- eISBN:
- 9780191596643
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199242550.003.0003
- Subject:
- Economics and Finance, Economic History, Financial Economics
The first section of this chapter traces the development of the organization of the London Stock Exchange from 1801 to 1851. The new ability to enforce the rules and regulations that increasingly ...
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The first section of this chapter traces the development of the organization of the London Stock Exchange from 1801 to 1851. The new ability to enforce the rules and regulations that increasingly governed the conduct of business in the securities market and the change in nature of the securities market that occurred––essentially it became a closed market––are discussed. The development of the rules and regulations, and operational mechanisms are outlined. The second section looks at the securities market itself during the same period, describing its growing importance within the entire British financial system (including financing the National Debt), the switch to foreign securities in 1822, and the gradual convergence of interest between the Foreign Funds Market and the Stock Exchange proper during the 1830s. Finally, the changes resulting from the railway mania of the 1840s are described, which resulted in the appearance of numerous provincial stock exchanges and a fundamental extension to the British securities market.Less
The first section of this chapter traces the development of the organization of the London Stock Exchange from 1801 to 1851. The new ability to enforce the rules and regulations that increasingly governed the conduct of business in the securities market and the change in nature of the securities market that occurred––essentially it became a closed market––are discussed. The development of the rules and regulations, and operational mechanisms are outlined. The second section looks at the securities market itself during the same period, describing its growing importance within the entire British financial system (including financing the National Debt), the switch to foreign securities in 1822, and the gradual convergence of interest between the Foreign Funds Market and the Stock Exchange proper during the 1830s. Finally, the changes resulting from the railway mania of the 1840s are described, which resulted in the appearance of numerous provincial stock exchanges and a fundamental extension to the British securities market.
Kim Oosterlinck
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780300190915
- eISBN:
- 9780300220933
- Item type:
- book
- Publisher:
- Yale University Press
- DOI:
- 10.12987/yale/9780300190915.001.0001
- Subject:
- Biology, Ecology
This is a book about hope and international finance. The repudiation of Russia’s debt by the Bolsheviks in 1918 affected French investors for several generations. The reason for this was the sheer ...
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This is a book about hope and international finance. The repudiation of Russia’s debt by the Bolsheviks in 1918 affected French investors for several generations. The reason for this was the sheer volume of money lent by institutional investors and private citizens alike. This book focuses on the reasons which prompted French investors to hope they would eventually be repaid. In this financial context, hope was reflected in the fluctuations of Russian bond prices. Indeed, in view of the extreme nature of the repudiation, the prices of Russian sovereign debt experienced only a modest decline. As a matter of fact, they actually increased after the repudiation, and their yields were well below those observed nowadays when sovereign debts are repudiated. Far from being a sign of irrational behaviour, this trend can be attributed to expectations that one or more extreme events could occur. Governments have four key incentives to repay their debts: fear of a loss of reputation and consequent exclusion from capital markets; fear of armed intervention; trade sanctions; and seizure of collateral. In the Russian case, investors remained hopeful for the aforementioned reasons but they also hoped that a third-party government would stand in for the Russian government and fulfil its obligations. This book assesses the relative weight of each of these reasons to hope and shows why investors refused to view their repudiated bonds as valueless.Less
This is a book about hope and international finance. The repudiation of Russia’s debt by the Bolsheviks in 1918 affected French investors for several generations. The reason for this was the sheer volume of money lent by institutional investors and private citizens alike. This book focuses on the reasons which prompted French investors to hope they would eventually be repaid. In this financial context, hope was reflected in the fluctuations of Russian bond prices. Indeed, in view of the extreme nature of the repudiation, the prices of Russian sovereign debt experienced only a modest decline. As a matter of fact, they actually increased after the repudiation, and their yields were well below those observed nowadays when sovereign debts are repudiated. Far from being a sign of irrational behaviour, this trend can be attributed to expectations that one or more extreme events could occur. Governments have four key incentives to repay their debts: fear of a loss of reputation and consequent exclusion from capital markets; fear of armed intervention; trade sanctions; and seizure of collateral. In the Russian case, investors remained hopeful for the aforementioned reasons but they also hoped that a third-party government would stand in for the Russian government and fulfil its obligations. This book assesses the relative weight of each of these reasons to hope and shows why investors refused to view their repudiated bonds as valueless.
Yujiro Hayami and Yoshihisa Godo
- Published in print:
- 2005
- Published Online:
- October 2005
- ISBN:
- 9780199272709
- eISBN:
- 9780191602870
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199272700.003.0009
- Subject:
- Economics and Finance, Development, Growth, and Environmental
The question of what kind of institutional set-up would be appropriate for promoting economic development is approached in terms of combination between market and state. The traditional debates on ...
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The question of what kind of institutional set-up would be appropriate for promoting economic development is approached in terms of combination between market and state. The traditional debates on the choice of development strategy between free trade and infant industry protection is examined with reference to the historical experiences of developed economies as well as recent confrontations between import substitution industrialization and the IMF-World Bank structural adjustment policies. The nature and significance of market failures versus government failures are illustrated in terms of comparisons between the Latin American Debt Crisis in the 1880s and the Asian Financial Crisis in the 1990s. The choice of the market versus the state, as well as growth versus equity, is discussed in reference to the changing paradigms in the IMF-World Bank.Less
The question of what kind of institutional set-up would be appropriate for promoting economic development is approached in terms of combination between market and state. The traditional debates on the choice of development strategy between free trade and infant industry protection is examined with reference to the historical experiences of developed economies as well as recent confrontations between import substitution industrialization and the IMF-World Bank structural adjustment policies. The nature and significance of market failures versus government failures are illustrated in terms of comparisons between the Latin American Debt Crisis in the 1880s and the Asian Financial Crisis in the 1990s. The choice of the market versus the state, as well as growth versus equity, is discussed in reference to the changing paradigms in the IMF-World Bank.
David French
- Published in print:
- 1995
- Published Online:
- October 2011
- ISBN:
- 9780198205593
- eISBN:
- 9780191676680
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198205593.003.0013
- Subject:
- History, British and Irish Modern History, Political History
From the beginning of the war British policy-makers had a clear appreciation that they were fighting to ensure a greater measure of security for Britain and its empire in the post-war world. They ...
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From the beginning of the war British policy-makers had a clear appreciation that they were fighting to ensure a greater measure of security for Britain and its empire in the post-war world. They were determined not only to win the war but also to win the peace, and to achieve both objectives at minimum cost to Britain. By 1916 the British were steadily sacrificing their long-term economic well-being to the immediate need to defeat the Central Powers. The effort and the price were indeed prodigious. On land Britain and its empire deployed 8,985,735 men on all fronts during the war, including 5,399,563 men who served on the western front. By the armistice, the BEF represented about a third of the total allied force in France and Belgium. The financial, economic, and human cost of this effort was equally immense. By 1920 the National Debt stood at £7,685 million, a twelvefold increase since 1914. These figures raise two questions: why did the Lloyd George government persist with the war despite its growing human, economic, and financial cost, and were Britain's sacrifices worthwhile?Less
From the beginning of the war British policy-makers had a clear appreciation that they were fighting to ensure a greater measure of security for Britain and its empire in the post-war world. They were determined not only to win the war but also to win the peace, and to achieve both objectives at minimum cost to Britain. By 1916 the British were steadily sacrificing their long-term economic well-being to the immediate need to defeat the Central Powers. The effort and the price were indeed prodigious. On land Britain and its empire deployed 8,985,735 men on all fronts during the war, including 5,399,563 men who served on the western front. By the armistice, the BEF represented about a third of the total allied force in France and Belgium. The financial, economic, and human cost of this effort was equally immense. By 1920 the National Debt stood at £7,685 million, a twelvefold increase since 1914. These figures raise two questions: why did the Lloyd George government persist with the war despite its growing human, economic, and financial cost, and were Britain's sacrifices worthwhile?
Matthew Martin
- Published in print:
- 2010
- Published Online:
- May 2010
- ISBN:
- 9780199578788
- eISBN:
- 9780191723049
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199578788.003.0010
- Subject:
- Economics and Finance, Macro- and Monetary Economics, Development, Growth, and Environmental
This chapter takes us through the revealing case in point of how Ethiopia's debt burden was lifted. It traces the laborious process that the government underwent in eight separate debt renegotiation ...
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This chapter takes us through the revealing case in point of how Ethiopia's debt burden was lifted. It traces the laborious process that the government underwent in eight separate debt renegotiation rounds in the Club from 1992 to 2004, four of them before the HIPC Initiative was launched and four as part of the Initiative. The final decision on HIPC relief for Ethiopia was then followed by a further reduction in debt under the MDRI, which cancelled almost all of Ethiopia's remaining external debt. Within the context of the donors' slow recognition of the need for deeper relief, the chapter emphasizes how important it was that the Ethiopian debt management team gained the capacity and confidence to independently make its own debt sustainability assessments. Ethiopia thus became better able to advocate for itself in negotiations in the Bretton Woods institutions and with its government creditors on how much relief it required.Less
This chapter takes us through the revealing case in point of how Ethiopia's debt burden was lifted. It traces the laborious process that the government underwent in eight separate debt renegotiation rounds in the Club from 1992 to 2004, four of them before the HIPC Initiative was launched and four as part of the Initiative. The final decision on HIPC relief for Ethiopia was then followed by a further reduction in debt under the MDRI, which cancelled almost all of Ethiopia's remaining external debt. Within the context of the donors' slow recognition of the need for deeper relief, the chapter emphasizes how important it was that the Ethiopian debt management team gained the capacity and confidence to independently make its own debt sustainability assessments. Ethiopia thus became better able to advocate for itself in negotiations in the Bretton Woods institutions and with its government creditors on how much relief it required.
Youssef Cassis
- Published in print:
- 2011
- Published Online:
- May 2011
- ISBN:
- 9780199600861
- eISBN:
- 9780191724930
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199600861.003.0003
- Subject:
- Business and Management, Finance, Accounting, and Banking, Business History
This chapter discusses the four major financial crises that broke out in the core industrial countries between the end of Bretton Woods in 1971 and the early 21st century: the Financial Instability ...
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This chapter discusses the four major financial crises that broke out in the core industrial countries between the end of Bretton Woods in 1971 and the early 21st century: the Financial Instability of the early 1970s and the ensuing bank failures, especially in Britain, Germany, and the United States, within the context of ‘stagflation’ and the end of fixed exchange rates; the International Debt Crisis of 1982, when the international financial system was threatened with collapse; the Japanese Banking Crisis of 1997–8, which undermined the financial system of the world's second largest economic power; and the Financial Debacle of 2007–8.Less
This chapter discusses the four major financial crises that broke out in the core industrial countries between the end of Bretton Woods in 1971 and the early 21st century: the Financial Instability of the early 1970s and the ensuing bank failures, especially in Britain, Germany, and the United States, within the context of ‘stagflation’ and the end of fixed exchange rates; the International Debt Crisis of 1982, when the international financial system was threatened with collapse; the Japanese Banking Crisis of 1997–8, which undermined the financial system of the world's second largest economic power; and the Financial Debacle of 2007–8.
Assaf Razin
- Published in print:
- 2015
- Published Online:
- May 2016
- ISBN:
- 9780262028592
- eISBN:
- 9780262327701
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262028592.003.0009
- Subject:
- Economics and Finance, International
Domestic and foreign investors may differ in their information sets regarding future domestic and foreign stock returns with no information frictions. This may lead to home bias in the domestic ...
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Domestic and foreign investors may differ in their information sets regarding future domestic and foreign stock returns with no information frictions. This may lead to home bias in the domestic country portfolio, which has important implications for the efficiency of domestic saving and investment.Less
Domestic and foreign investors may differ in their information sets regarding future domestic and foreign stock returns with no information frictions. This may lead to home bias in the domestic country portfolio, which has important implications for the efficiency of domestic saving and investment.
Mark Featherstone (ed.)
- Published in print:
- 2019
- Published Online:
- January 2020
- ISBN:
- 9781447339526
- eISBN:
- 9781447339571
- Item type:
- book
- Publisher:
- Policy Press
- DOI:
- 10.1332/policypress/9781447339526.001.0001
- Subject:
- Sociology, Economic Sociology
In recent years, and particularly since the global economic crash, the issue of debt has moved centre stage in social, political, and economic thought. Although processes of financialisation have ...
More
In recent years, and particularly since the global economic crash, the issue of debt has moved centre stage in social, political, and economic thought. Although processes of financialisation have meant that extreme indebtedness has been a latent global problem since the 1980s, it was only in the wake of the crash that debt became a manifest systemic issue. This was because it was no longer possible to endlessly defer repayment into the future on the basis of a fantasy of ceaseless growth because it suddenly became clear that the financial system was not good for the debts it had distributed across the globe. Given this crisis, endless finance and repayment projected into the distant future has been transformed into ‘the dead weight of debt’ and led to the emergence of a new class system based upon creditors and debtors. The emergence of this new situation challenges sociologists and policy-makers to think about possible solutions to the socio-economic horror of debt bondage that threatens to destroy the future of not only deeply indebted individuals and their families, but also generations to come who currently stand to inherit a decrepit society that seems hopelessly trapped between a fantasy of endless growth based in financial speculation and a dim recognition of the need for sustainability that finds violent rearticulation in austerity and common sense narratives about the need to balance the books. In this book key thinkers on the topic of debt debate the social, political, and economic, meanings of the state of indebtedness.Less
In recent years, and particularly since the global economic crash, the issue of debt has moved centre stage in social, political, and economic thought. Although processes of financialisation have meant that extreme indebtedness has been a latent global problem since the 1980s, it was only in the wake of the crash that debt became a manifest systemic issue. This was because it was no longer possible to endlessly defer repayment into the future on the basis of a fantasy of ceaseless growth because it suddenly became clear that the financial system was not good for the debts it had distributed across the globe. Given this crisis, endless finance and repayment projected into the distant future has been transformed into ‘the dead weight of debt’ and led to the emergence of a new class system based upon creditors and debtors. The emergence of this new situation challenges sociologists and policy-makers to think about possible solutions to the socio-economic horror of debt bondage that threatens to destroy the future of not only deeply indebted individuals and their families, but also generations to come who currently stand to inherit a decrepit society that seems hopelessly trapped between a fantasy of endless growth based in financial speculation and a dim recognition of the need for sustainability that finds violent rearticulation in austerity and common sense narratives about the need to balance the books. In this book key thinkers on the topic of debt debate the social, political, and economic, meanings of the state of indebtedness.
David Andrew Nichols
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9781469626895
- eISBN:
- 9781469626918
- Item type:
- book
- Publisher:
- University of North Carolina Press
- DOI:
- 10.5149/northcarolina/9781469626895.001.0001
- Subject:
- History, American History: early to 18th Century
For a quarter of a century, the United States government operated a system of public trading posts, or factories, in the eastern North American borderland. The factories sold manufactured goods to ...
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For a quarter of a century, the United States government operated a system of public trading posts, or factories, in the eastern North American borderland. The factories sold manufactured goods to Indians at cost and bought their peltry, foodstuffs, and other wares at market rates. They also served as annuity distribution centers and host sites for treaty conferences. The U.S. government used the factories to build its influence in Indian communities, win Native American allies, and (in a few cases) to leverage Indian land sales with factory debts. For their part, Indian men and women turned the trading houses to their own uses: finding alternatives to British and Spanish traders; acquiring gifts and credit; enlisting the factors to resolve interethnic disputes; and selling goods for which the market had softened. Indians ultimately viewed the factories as alliance centers: during the War of 1812 the United States' Native allies employed them as arsenals and rally points, and its Indian adversaries viewed them as targets to capture or destroy. After that war, Superintendent Thomas McKenney tried to revive the factories by tying them to the Indian “civilization” program, advocating use of the system's revenues to fund Indian schools. Congress and the president, however, had come to see Indian alliance as less important than saving public money in an era of fiscal austerity, and fur trading as incompatible with the “civilized” lifeways they wanted Indians to adopt. With some pressure from the American Fur Company, they closed the factories permanently in 1822.Less
For a quarter of a century, the United States government operated a system of public trading posts, or factories, in the eastern North American borderland. The factories sold manufactured goods to Indians at cost and bought their peltry, foodstuffs, and other wares at market rates. They also served as annuity distribution centers and host sites for treaty conferences. The U.S. government used the factories to build its influence in Indian communities, win Native American allies, and (in a few cases) to leverage Indian land sales with factory debts. For their part, Indian men and women turned the trading houses to their own uses: finding alternatives to British and Spanish traders; acquiring gifts and credit; enlisting the factors to resolve interethnic disputes; and selling goods for which the market had softened. Indians ultimately viewed the factories as alliance centers: during the War of 1812 the United States' Native allies employed them as arsenals and rally points, and its Indian adversaries viewed them as targets to capture or destroy. After that war, Superintendent Thomas McKenney tried to revive the factories by tying them to the Indian “civilization” program, advocating use of the system's revenues to fund Indian schools. Congress and the president, however, had come to see Indian alliance as less important than saving public money in an era of fiscal austerity, and fur trading as incompatible with the “civilized” lifeways they wanted Indians to adopt. With some pressure from the American Fur Company, they closed the factories permanently in 1822.
Martin Guzman and Joseph E. Stiglitz
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780231179263
- eISBN:
- 9780231542029
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179263.003.0002
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Recent controversies surrounding sovereign debt restructurings show the weaknesses of the current market-based system in achieving efficient and fair solutions to sovereign debt crises. This article ...
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Recent controversies surrounding sovereign debt restructurings show the weaknesses of the current market-based system in achieving efficient and fair solutions to sovereign debt crises. This article reviews the existing problems and proposes solutions. It argues that improvements in the language of contracts, although beneficial, cannot provide a comprehensive, efficient, and equitable solution to the problems faced in restructurings–but there are improvements within the contractual approach that should be implemented. Ultimately, the contractual approach must be complemented by a multinational legal framework that facilitates restructurings based on principles of efficiency and equity. Given the current geopolitical constraints, in the short-run we advocate the implementation of a “soft law” approach, built on the recognition of the limitations of the private contractual approach and on a set of principles – most importantly, the restoration of sovereign immunity – over which there may be consensus. We suggest that in a context of political economy tensions it should be impossible for a government to sign away the sovereign immunity either for itself or successor governments. The framework could be implemented through the United Nations, or it could prompt the creation of a new institution.Less
Recent controversies surrounding sovereign debt restructurings show the weaknesses of the current market-based system in achieving efficient and fair solutions to sovereign debt crises. This article reviews the existing problems and proposes solutions. It argues that improvements in the language of contracts, although beneficial, cannot provide a comprehensive, efficient, and equitable solution to the problems faced in restructurings–but there are improvements within the contractual approach that should be implemented. Ultimately, the contractual approach must be complemented by a multinational legal framework that facilitates restructurings based on principles of efficiency and equity. Given the current geopolitical constraints, in the short-run we advocate the implementation of a “soft law” approach, built on the recognition of the limitations of the private contractual approach and on a set of principles – most importantly, the restoration of sovereign immunity – over which there may be consensus. We suggest that in a context of political economy tensions it should be impossible for a government to sign away the sovereign immunity either for itself or successor governments. The framework could be implemented through the United Nations, or it could prompt the creation of a new institution.
Timothy B. DeSieno
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780231179263
- eISBN:
- 9780231542029
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179263.003.0010
- Subject:
- Economics and Finance, Macro- and Monetary Economics
The chapter makes three points regarding recent improvements for sovereign debt contracts suggested by the International Capital Market Association (ICMA), which were later endorsed by the IMF. ...
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The chapter makes three points regarding recent improvements for sovereign debt contracts suggested by the International Capital Market Association (ICMA), which were later endorsed by the IMF. First, he argues that the new clauses are a useful and potentially important instrument to deal with the problem of holdout creditors. Second, he claims the new clauses are not a panacea. This assessment reflects the fact that it will take some time for these clauses to be embedded in the stock of outstanding bonds and that, whatever their merits, the new clauses do not fully address the issues of unenforceability and discharge of sovereign debts. Third, the debate between voluntary/contractual and statutory approaches is a false dichotomy. Contractual approaches will necessarily be incomplete and the design of “institutions,” whether bankruptcy provisions embodied in formal treaty or the responses of existing international financial institutions, will influence the outcome of sovereign debt restructurings.Less
The chapter makes three points regarding recent improvements for sovereign debt contracts suggested by the International Capital Market Association (ICMA), which were later endorsed by the IMF. First, he argues that the new clauses are a useful and potentially important instrument to deal with the problem of holdout creditors. Second, he claims the new clauses are not a panacea. This assessment reflects the fact that it will take some time for these clauses to be embedded in the stock of outstanding bonds and that, whatever their merits, the new clauses do not fully address the issues of unenforceability and discharge of sovereign debts. Third, the debate between voluntary/contractual and statutory approaches is a false dichotomy. Contractual approaches will necessarily be incomplete and the design of “institutions,” whether bankruptcy provisions embodied in formal treaty or the responses of existing international financial institutions, will influence the outcome of sovereign debt restructurings.
Jürgen Kaiser
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780231179263
- eISBN:
- 9780231542029
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179263.003.0013
- Subject:
- Economics and Finance, Macro- and Monetary Economics
The chapter discusses the “institutionalization” of a multinational framework for sovereign debt restructuring. In Kaiser’s view, the institutionalization should comply to three basic principles: ...
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The chapter discusses the “institutionalization” of a multinational framework for sovereign debt restructuring. In Kaiser’s view, the institutionalization should comply to three basic principles: first, it needs to restructure debt in a single comprehensive process, with no payment obligations being exempted from the process; second, it needs to allow for an impartial decision making about the terms of any debt restructuring; and third, this decision must be based on an impartial assessment of the debtor’s situation. He claims that there are not many historical precedents for a sovereign debt restructuring which complies with these conditions, but the case of Indonesia in 1969 may be inspiring. He argues that a “Sovereign debt Restructuring Liaison Office” mandated by the UN and run independently from any debtor or creditor interference could be a catalytic element with the potential to overcome the shortcomings of existing procedures. In this view, it could facilitate a comprehensive negotiation format with all stakeholders around the table; it could provide an impartial and thus realistic assessment of the need for debt relief; and it could suggest an un-biased solution. Such an “office” could be established immediately as an outcome of the present UN-General Assembly consultation process and then develop its rules, regulations and infrastructure over time.Less
The chapter discusses the “institutionalization” of a multinational framework for sovereign debt restructuring. In Kaiser’s view, the institutionalization should comply to three basic principles: first, it needs to restructure debt in a single comprehensive process, with no payment obligations being exempted from the process; second, it needs to allow for an impartial decision making about the terms of any debt restructuring; and third, this decision must be based on an impartial assessment of the debtor’s situation. He claims that there are not many historical precedents for a sovereign debt restructuring which complies with these conditions, but the case of Indonesia in 1969 may be inspiring. He argues that a “Sovereign debt Restructuring Liaison Office” mandated by the UN and run independently from any debtor or creditor interference could be a catalytic element with the potential to overcome the shortcomings of existing procedures. In this view, it could facilitate a comprehensive negotiation format with all stakeholders around the table; it could provide an impartial and thus realistic assessment of the need for debt relief; and it could suggest an un-biased solution. Such an “office” could be established immediately as an outcome of the present UN-General Assembly consultation process and then develop its rules, regulations and infrastructure over time.
Marilou Uy and Shichao Zhou
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780231179263
- eISBN:
- 9780231542029
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179263.003.0003
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This paper focuses on the sovereign debt of developing countries, particularly over the last decade. It provides an overview of broadly favorable public debt trends in developing countries. It notes ...
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This paper focuses on the sovereign debt of developing countries, particularly over the last decade. It provides an overview of broadly favorable public debt trends in developing countries. It notes that the increased access of developing countries to international financial markets and a wider set range of creditors and investors brings with it opportunities for investments that stimulate growth but also new, additional sources of risk. The paper also describes the unique debt management challenges faced by specific groups of countries. While this paper acknowledges that countries have the responsibility to manage their debt, it also recognizes that the global community has a complementary role to enable fair and efficient sovereign debt resolution that minimizes the adverse impact on the prospects for economic recovery of debtor countries. Yet there is no clear global consensus on how to strengthen the system of sovereign debt resolutions. Countries hold widely divergent views on how these issues should be resolved but recent experience in debt restructuring in some countries point to the need for collective agreement on meaningful reforms. To this end, the paper concludes by tracing the evolution of discussions and policy perspectives within and between developing countries and intergovernmental forums and potential approaches that could foster consensus.Less
This paper focuses on the sovereign debt of developing countries, particularly over the last decade. It provides an overview of broadly favorable public debt trends in developing countries. It notes that the increased access of developing countries to international financial markets and a wider set range of creditors and investors brings with it opportunities for investments that stimulate growth but also new, additional sources of risk. The paper also describes the unique debt management challenges faced by specific groups of countries. While this paper acknowledges that countries have the responsibility to manage their debt, it also recognizes that the global community has a complementary role to enable fair and efficient sovereign debt resolution that minimizes the adverse impact on the prospects for economic recovery of debtor countries. Yet there is no clear global consensus on how to strengthen the system of sovereign debt resolutions. Countries hold widely divergent views on how these issues should be resolved but recent experience in debt restructuring in some countries point to the need for collective agreement on meaningful reforms. To this end, the paper concludes by tracing the evolution of discussions and policy perspectives within and between developing countries and intergovernmental forums and potential approaches that could foster consensus.
Yanis Varoufakis
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780231179263
- eISBN:
- 9780231542029
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179263.003.0006
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Greek Debt Denial: A Modest Debt Restructuring Proposal and Why It Was Ignored, by Yanis Varoufakis
Greek Debt Denial: A Modest Debt Restructuring Proposal and Why It Was Ignored, by Yanis Varoufakis
Anna Gelpern, Ben Heller, and Brad Setser
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780231179263
- eISBN:
- 9780231542029
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179263.003.0007
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Count the Limbs: Designing Robust Aggregation Clauses in Sovereign Bonds, by Anna Gelpern, Ben Heller, and Brad Setser
Count the Limbs: Designing Robust Aggregation Clauses in Sovereign Bonds, by Anna Gelpern, Ben Heller, and Brad Setser
Richard Gitlin and Brett House
- Published in print:
- 2016
- Published Online:
- January 2017
- ISBN:
- 9780231179263
- eISBN:
- 9780231542029
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231179263.003.0008
- Subject:
- Economics and Finance, Macro- and Monetary Economics
The international community made some important advances in recent years to reduce the costs of sovereign debt restructuring for debtors and creditors through improved contractual language for bond ...
More
The international community made some important advances in recent years to reduce the costs of sovereign debt restructuring for debtors and creditors through improved contractual language for bond agreements and the reform of some International Monetary Fund (IMF) processes. Little, however, has been done to reduce the inhibitions debtor countries face in working proactively with creditors to prevent and treat sovereign debt distress. This chapter lays out a pragmatic work program to reduce the ex ante costs of sovereign debt restructuring, complemented by additional measures to mitigate the in medias res and ex post costs of restructuring. Wide-spread and even full implementation of these proposals would not create a perfect ecosystem for sovereign debt restructuring, but it would represent a significant improvement on the status quo.Less
The international community made some important advances in recent years to reduce the costs of sovereign debt restructuring for debtors and creditors through improved contractual language for bond agreements and the reform of some International Monetary Fund (IMF) processes. Little, however, has been done to reduce the inhibitions debtor countries face in working proactively with creditors to prevent and treat sovereign debt distress. This chapter lays out a pragmatic work program to reduce the ex ante costs of sovereign debt restructuring, complemented by additional measures to mitigate the in medias res and ex post costs of restructuring. Wide-spread and even full implementation of these proposals would not create a perfect ecosystem for sovereign debt restructuring, but it would represent a significant improvement on the status quo.
David M. Webber
- Published in print:
- 2017
- Published Online:
- May 2018
- ISBN:
- 9781474423564
- eISBN:
- 9781474438384
- Item type:
- chapter
- Publisher:
- Edinburgh University Press
- DOI:
- 10.3366/edinburgh/9781474423564.003.0005
- Subject:
- Political Science, UK Politics
The first of these case study chapters in chapter 5 draws parallels between the economic framework designed by Treasury officials at home and ‘the new international economic architecture’ that Gordon ...
More
The first of these case study chapters in chapter 5 draws parallels between the economic framework designed by Treasury officials at home and ‘the new international economic architecture’ that Gordon Brown was keen to pursue abroad. This would provide the basis for a new approach to debt relief to reform the Heavily Indebted Poor Countries initiative. The new Multilateral Debt Relief Initiative would be conditional upon recipient countries meeting their obligations towards this new economic architecture, designed by Brown and based upon the principles of the ‘post-Washington Consensus’. This approach however, ran counter to many within civil society who viewed the issue of debt relief in ‘moral’ rather than simply ‘economic’ terms. In meeting with these different faith groups, NGOs and other debt activists, Brown certainly appeared sympathetic to such claims but the biblical language of forgiveness, justice and redemption that he used in speaking to these audiences differed from when he spoke in altogether more punitive terms to the international financial institutions. Here Brown spoke of the need for greater stability, demanded that indebted countries recognise their financial obligations, and urged greater surveillance by the International Monetary Fund of these countries national accounts.Less
The first of these case study chapters in chapter 5 draws parallels between the economic framework designed by Treasury officials at home and ‘the new international economic architecture’ that Gordon Brown was keen to pursue abroad. This would provide the basis for a new approach to debt relief to reform the Heavily Indebted Poor Countries initiative. The new Multilateral Debt Relief Initiative would be conditional upon recipient countries meeting their obligations towards this new economic architecture, designed by Brown and based upon the principles of the ‘post-Washington Consensus’. This approach however, ran counter to many within civil society who viewed the issue of debt relief in ‘moral’ rather than simply ‘economic’ terms. In meeting with these different faith groups, NGOs and other debt activists, Brown certainly appeared sympathetic to such claims but the biblical language of forgiveness, justice and redemption that he used in speaking to these audiences differed from when he spoke in altogether more punitive terms to the international financial institutions. Here Brown spoke of the need for greater stability, demanded that indebted countries recognise their financial obligations, and urged greater surveillance by the International Monetary Fund of these countries national accounts.
Hayk Kupelyants
- Published in print:
- 2018
- Published Online:
- July 2018
- ISBN:
- 9780198807230
- eISBN:
- 9780191844942
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198807230.001.0001
- Subject:
- Law, Company and Commercial Law
The monograph examines sovereign debt litigation before the English and New York courts. English and New York courts are the two main jurisdictions customarily chosen to resolve sovereign debt ...
More
The monograph examines sovereign debt litigation before the English and New York courts. English and New York courts are the two main jurisdictions customarily chosen to resolve sovereign debt disputes. The book sets out parties’ litigation choices at various stages of proceedings and provides the legal background against which parties to a sovereign bond may wish to negotiate. The defining characteristic of the monograph is that it examines sovereign debt litigation through the prism of private law. The monograph clearly grounds its analysis in the law as it exists, rather than purely policy-oriented reasoning (albeit it keeps a critical eye on the reasoning of the courts). The monograph concentrates on diverse litigation tactics and arbitrage strategies available to bondholders and sovereign debtors that appear before the English courts. In most cases, private creditors may obtain summary judgments with relative ease. That said, often serious issues arise at the stages of assumption of jurisdiction, determination of the governing law of sovereign bonds or substantive resolution of the claims in English proceedings. Similarly, the enforcement of sovereign bonds against the assets of the sovereign often presents serious obstacles, most significantly the doctrine of State immunity. The book offers an exhaustive account of litigation tactics available to bondholders and sovereign debtors alike. The book is unique in the breadth of its coverage. It examines issues of jurisdiction and choice of law at the preliminary stages of litigation, substantive challenges of various sorts to sovereign debt restructurings and to the repayment of bonds on merits, and enforcement of final judgments against the State and its assets in the post-judgment phase.Less
The monograph examines sovereign debt litigation before the English and New York courts. English and New York courts are the two main jurisdictions customarily chosen to resolve sovereign debt disputes. The book sets out parties’ litigation choices at various stages of proceedings and provides the legal background against which parties to a sovereign bond may wish to negotiate. The defining characteristic of the monograph is that it examines sovereign debt litigation through the prism of private law. The monograph clearly grounds its analysis in the law as it exists, rather than purely policy-oriented reasoning (albeit it keeps a critical eye on the reasoning of the courts). The monograph concentrates on diverse litigation tactics and arbitrage strategies available to bondholders and sovereign debtors that appear before the English courts. In most cases, private creditors may obtain summary judgments with relative ease. That said, often serious issues arise at the stages of assumption of jurisdiction, determination of the governing law of sovereign bonds or substantive resolution of the claims in English proceedings. Similarly, the enforcement of sovereign bonds against the assets of the sovereign often presents serious obstacles, most significantly the doctrine of State immunity. The book offers an exhaustive account of litigation tactics available to bondholders and sovereign debtors alike. The book is unique in the breadth of its coverage. It examines issues of jurisdiction and choice of law at the preliminary stages of litigation, substantive challenges of various sorts to sovereign debt restructurings and to the repayment of bonds on merits, and enforcement of final judgments against the State and its assets in the post-judgment phase.
Mike Berry
- Published in print:
- 2013
- Published Online:
- January 2014
- ISBN:
- 9780199686506
- eISBN:
- 9780191766374
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199686506.001.0001
- Subject:
- Economics and Finance, History of Economic Thought
This book looks at the background to and causes of the global economic crisis that erupted in 2008 and is with us still. It does this by revisiting a classic book of the past, John Kenneth ...
More
This book looks at the background to and causes of the global economic crisis that erupted in 2008 and is with us still. It does this by revisiting a classic book of the past, John Kenneth Galbraith’s The Affluent Society. Each chapter takes a major theme of his book, distils Galbraith’s arguments and then discusses to what extent they cast light on current developments, both in the developed economies and in the economics discipline. The themes include: inequality, insecurity, inflation, debt, consumer behaviour, ‘financialisation’, the economic role of government (‘social balance’), the power of ideas, the role of power in the economy and the nature of the good society. These are enduring concerns for citizens, no more than now as governments, businesses and consumers seek to recover from the economic tsunami that washed over the major Western economies (and is yet to fully recede). As such, the book deals with the big current problems of capitalism and the huge challenges facing democratic governments in tackling them. The book argues that orthodox economic models and policy advice failed spectacularly to warn of impending crisis and has subsequently failed to help lift the struggling advanced economies back on the path to sustainable prosperity. It concludes that although much has happened, in the global economy and in the discipline of economics, since Galbraith wrote, many of the themes he raised and answers he provided remain relevant today.Less
This book looks at the background to and causes of the global economic crisis that erupted in 2008 and is with us still. It does this by revisiting a classic book of the past, John Kenneth Galbraith’s The Affluent Society. Each chapter takes a major theme of his book, distils Galbraith’s arguments and then discusses to what extent they cast light on current developments, both in the developed economies and in the economics discipline. The themes include: inequality, insecurity, inflation, debt, consumer behaviour, ‘financialisation’, the economic role of government (‘social balance’), the power of ideas, the role of power in the economy and the nature of the good society. These are enduring concerns for citizens, no more than now as governments, businesses and consumers seek to recover from the economic tsunami that washed over the major Western economies (and is yet to fully recede). As such, the book deals with the big current problems of capitalism and the huge challenges facing democratic governments in tackling them. The book argues that orthodox economic models and policy advice failed spectacularly to warn of impending crisis and has subsequently failed to help lift the struggling advanced economies back on the path to sustainable prosperity. It concludes that although much has happened, in the global economy and in the discipline of economics, since Galbraith wrote, many of the themes he raised and answers he provided remain relevant today.
