Download or read book Structuring and Restructuring Sovereign Debt written by Mr.Patrick Bolton and published by International Monetary Fund. This book was released on 2007-08-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure ex post. We show however, that competition for repayment among lenders may result in a sovereign debt that is excessively difficult to restructure in equilibrium. This inefficiency may be alleviated by a suitably designed bankruptcy regime that facilitates debt restructuring.

Download or read book Structuring and Restructuring Sovereign Debt bthe Role of Bankruptcy Regime written by Patrick Bolton and published by . This book was released on 2007 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Structuring and Restructuring Sovereign Debt written by Patrick Bolton and published by International Monetary Fund. This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure. We show within a simple model how competition for repayment between lenders may result in sovereign debt that is excessively difficult to restructure in equilibrium. Alleviating this inefficiency requires a sovereign debt restructuring mechanism that fulfills some of the functions of corporate bankruptcy regimes, in particular the enforcement of seniority and subordination clauses in debt contracts.

Download or read book Sovereign Debt Restructurings 1950 2010 written by Mr.Udaibir S. Das and published by International Monetary Fund. This book was released on 2012-08-01 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides a comprehensive survey of pertinent issues on sovereign debt restructurings, based on a newly constructed database. This is the first complete dataset of sovereign restructuring cases, covering the six decades from 1950–2010; it includes 186 debt exchanges with foreign banks and bondholders, and 447 bilateral debt agreements with the Paris Club. We present new stylized facts on the outcome and process of debt restructurings, including on the size of haircuts, creditor participation, and legal aspects. In addition, the paper summarizes the relevant empirical literature, analyzes recent restructuring episodes, and discusses ongoing debates on crisis resolution mechanisms, credit default swaps, and the role of collective action clauses.

Download or read book Structuring and Restructuring Sovereign Debt written by Mr. Patrick Bolton and published by INTERNATIONAL MONETARY FUND. This book was released on 2007-08-01 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure ex post. We show however, that competition for repayment among lenders may result in a sovereign debt that is excessively difficult to restructure in equilibrium. This inefficiency may be alleviated by a suitably designed bankruptcy regime that facilitates debt restructuring.

Download or read book Sovereign Debt Restructuring and the Best Interest of Creditors written by William W. Bratton and published by . This book was released on 2014 with total page 79 pages. Available in PDF, EPUB and Kindle. Book excerpt: In April 2002 the International Monetary Fund introduced a sovereign bankruptcy proposal only to be rebuffed by the United States Treasury. Where the IMF wanted a mandatory bankruptcy regime, the Treasury wanted to solve distress problems with contractual devices. Sovereign bondholders and sovereign issuers themselves flatly rejected both proposals, even though they were nominally the beneficiaries of both proponents. This Article addresses and explains this bondholder reaction. In so doing, it takes a highly skeptical view of the IMF's proposal even as it shows that the incentive structure surrounding sovereign lending renders untenable the Treasury's contractarian proposal. The Article's analysis follows from a review and restatement of the economic learning on sovereign debt relationships.The IMF and the Treasury share the objective facilitating restructuring by substituting a regime of collective action for the prevailing practice of requiring unanimous bondholder consent to significant amendments of bond contracts. In so doing they follow a conventional wisdom respecting bond contracts under which standard unanimity provisions are inefficient and irrational. The Article shows that this dismissal of the unanimity requirement comes too quickly. Under our analysis of the problem the debtor distress, bondholders rationally may prefer to make compositions harder to conclude. There is no first best equilibrium bond contract; instead bondholders select from a menu of second best forms, making trade offs between unanimous action and collective action provisions in an imperfect world. One factor leading lenders to favor unanimous action is the need to self protect. In a world without a good faith backstop, creditors motivated by side deals can take advantage of majority rule to impose suboptimal compositions. Holding out is the only weapon available to the minority creditor. The Article argues that, given such side deals, a stable majoritarian regime cannot be achieved as a matter of free contract. Mandate will be necessary. It follows that the Treasury's contractarian approach is implausible absent a backstop regime of intercreditor good faith duties. The Article draws on the history of corporate reorganization prior to the enactment of the section 77B of the Bankruptcy Act of 1934 to show that courts have grappled with these questions before, intervening aggressively on equitable principles.

Download or read book Sovereign Debt Restructuring The Role and Limits of Public International Law e Book written by VITERBO ANNAMARIA and published by G Giappichelli Editore. This book was released on 2020-06-09 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Feasibility of the Sovereign Debt Restructuring Mechanism written by Augusto César Silva Rodrigues and published by . This book was released on 2003 with total page 120 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Governing Sovereign Bankruptcy written by Skylar Brooks and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines three sets of recent initiatives aimed at reforming the international regime for sovereign debt restructuring. The first involved changes to the rules governing IMF lending and their role in triggering debt restructurings. The second entailed reforms to sovereign bond contracts in order to facilitate smoother restructuring processes. The third took place within the UN, where states advanced the idea of an international hard-law approach to debt restructuring but settled for a set of soft-law principles. Taken together, these initiatives had a mixed impact on the regime. Contract reforms strengthened bond restructuring processes; IMF reforms weakened the mechanism designed to trigger necessary restructurings; and UN reform efforts had little concrete impact in either direction. What explains the variation in these recent regulatory outcomes? I argue that this variation can be understood according to two dimensions: the process-trigger distinction and the legal-institutional design of process-oriented mechanisms. A trigger mechanism is hard to institutionalize because of the time-inconsistent preferences of powerful states and their more general desire-supported by sovereign debtors and private creditors and amplified by recent experiences-for case-by-case decision-making when it comes to if and when to trigger a debt restructuring. Compared to the trigger, some but not all process mechanisms have greater odds of success, depending on their design. Hard-law designs face huge political opposition, whereas soft-law tools can encounter political challenges but are also of limited effectiveness in this issue area. By contrast, private-law contracts provide useful mechanisms for navigating the trade-offs of regulating debt restructuring processes, especially for dominant states. I also argue that historical legacies and processes have influenced recent reform outcomes, but mainly through their ability to further enhance or diminish the prospects of mechanisms whose political utility had already been determined by the process-trigger distinction and/or their legal-institutional design. This thesis makes an empirical contribution to IPE and global governance literatures by providing the first comprehensive analysis of recent sovereign debt restructuring reforms. It makes important theoretical contributions to these literatures by developing an analytical framework for understanding the politics of regulatory reform within the sovereign debt restructuring regime. It also offers insights that contribute to wider debates about institutional design and development, including those related to the choice of international hard-law or soft-law governance instruments, the use of contracts in global governance, and the role of historical legacies and processes in shaping regulatory outcomes.

Download or read book Inside the Black Box written by David A. Skeel and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: For at least two decades now, commentators have suggested that international policymakers should establish a sovereign bankruptcy regime. In 2002, the debate intensified when the International Monetary Fund (IMF) explicitly endorsed the sovereign bankruptcy concept, and offered a detailed proposal for what the Fund refers to as a "Sovereign Debt Restructuring Mechanism." In this Article, we consider the arguments in favor of sovereign bankruptcy, assess the IMF's SDRM, and develop our own sovereign bankruptcy framework. Perhaps the single most important theme of our analysis is the importance of promoting adherence to absolute priority wherever possible. Contrary to much of the criticism of sovereign bankruptcy, which worries that this approach would seriously undermine creditors' entitlements, we argue that sovereign bankruptcy can actually assure greater adherence to absolute priority than the status quo. Because it is often impracticable to lend to sovereigns on a collateralized basis, creditors currently have great difficulty assuring that their priorities will be honored. Even ostensibly collateralized obligations, moreover, may not guarantee priority treatment, as evidenced by the subversion of priorities when Ecuador restructured its debt in 1999. We argue in this Article that the classification and voting rules of a sovereign bankruptcy regime can be used to address this problem. As a baseline, we propose that the SDRM or other framework enforce strict, first-in-time absolute priority. Bonds issued first would have priority over those issued later. The only exceptions to first-in-time priority would involve trade debt (which would always be treat as a priority obligation) and collateralized lending (which would be given priority treatment under some circumstances). Against this backdrop, we propose a two step classification and voting process for confirming a restructuring plan. The debtor would first make a proposal as to how much its overall debt would be scaled back - that is, how large the overall "haircut" to creditors would be. If a majority of all creditors approved the haircut, the second step would simply entail reducing the creditors' claims in this amount, starting with the lowest priority creditors and working up the priority hierarchy. This two step approach not only would reinforce the creditors' priorities within the SDRM; it also would clarify their priorities outside of the restructuring process. The Article proceeds as follows. Part I explores the principal alternatives to sovereign bankruptcy - collective action provisions and the status quo - and explains why neither is an adequate substitute for an SDRM. In Part II, we provide a brief overview of the IMF's current proposal, and note some of its principal shortcomings - most importantly, its inadequate consideration of the SDRM's ex ante effects. Parts III-VII then develop our proposal. Part III takes up the question whether to impose a stay on litigation. Part IV then gets to the heart of the SDRM, and outlines the classification and voting scheme. Part V addresses the issue of interim financing. In Part VI, we argue that oversight should be vested in existing bankruptcy and insolvency courts. We then complete the discussion by discussing opt-out in Part VII, and tie the analysis together with a brief conclusion.

Download or read book Rethinking Sovereign Debt written by Odette Lienau and published by Harvard University Press. This book was released on 2014-02-18 with total page 342 pages. Available in PDF, EPUB and Kindle. Book excerpt: Conventional wisdom holds that all nations must repay debt. Regardless of the legitimacy of the regime that signs the contract, a country that fails to honor its obligations damages its reputation. Yet should today's South Africa be responsible for apartheid-era debt? Is it reasonable to tether postwar Iraq with Saddam Hussein's excesses? Rethinking Sovereign Debt is a probing analysis of how sovereign debt continuity--the rule that nations should repay loans even after a major regime change, or else expect consequences--became dominant. Odette Lienau contends that the practice is not essential for functioning capital markets, and demonstrates its reliance on absolutist ideas that have come under fire over the last century. Lienau traces debt continuity from World War I to the present, emphasizing the role of government officials, the World Bank, and private markets in shaping our existing framework. Challenging previous accounts, she argues that Soviet Russia's repudiation of Tsarist debt and Great Britain's 1923 arbitration with Costa Rica hint at the feasibility of selective debt cancellation. Rethinking Sovereign Debt calls on scholars and policymakers to recognize political choice and historical precedent in sovereign debt and reputation, in order to move beyond an impasse when a government is overthrown.

Download or read book Bankruptcy Procedures for Sovereigns written by Kenneth Rogoff and published by International Monetary Fund. This book was released on 2002-08 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper describes the evolution of ideas to apply bankruptcy reorganization principles to sovereign debt crises. Our focus is on policy proposals between the late 1970s and Anne Krueger's (2001) proposed "Sovereign Debt-Restructuring Mechanism," with brief reference to the economics literature on sovereign debt. We describe the perceived inefficiencies that motivate proposals, and how proposals seek to change debtor and creditor incentives. We find that there has been a moving concensus on what constitutes the underlying problem, but not on how to fix it. The range of proposed approaches remains broad and only recently shows some signs of narrowing.

Download or read book Creditor Rights and the Public Interest written by Janis Pearl Sarra and published by . This book was released on 2003 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt: Creditor Rights and the Public Interest supports the greater representation of non-traditional creditors in the process of insolvency restructuring in Canada, concentrating particularly on restructuring under the federal Companies' Creditors' Arrangement Act (CCAA). Arguing in favour of the representation of such non-traditional creditors as workers, consumers, trade suppliers, and local governments, Janis Sarra describes the existing process of addressing their interests, analyzes four case studies that focus on non-creditor groups, and compares the Canadian approach to that of several other countries, such as Germany, France, and the United States. Sarra draws on a comprehensive body of academic literature that covers a broad range of issues--insolvency theory, corporate governance theory, legislative history, and bankruptcy and insolvency practice. She further surveys the relevant legislation and supplements her analysis with insights drawn from extensive primary research of court records and personal interviews with lawyers, judges, and government officials. Creditor Rights and the Public Interest ultimately illustrates the way in which the concept of the public interest can be utilized to foreground the concerns of non-traditional stakeholders. Sarra provides a coherent account of the justification for recognizing these creditors by situating insolvency law in a legal regime that realizes a duty to maximize all of the interests and investments at stake in the corporation. In an academic field where scholarship is currently scarce, Sarra's text will be a welcome contribution.

Download or read book From Bail out to Bail in written by Virginia Skidmore Rutledge and published by International Monetary Fund. This book was released on 2012-04-24 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.

Download or read book Sovereign Debt Restructuring and Growth written by Lorenzo Forni and published by International Monetary Fund. This book was released on 2016-08-16 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the effect of sovereign debt restructurings with external private creditors on growth during the period 1970-2010. We find that there are bad and good (or not so bad) debt restructurings for growth. While growth generally declines in the aftermath of a sovereign debt restructuring, agreements that allow countries to exit a default spell (final restructurings) are associated with improving growth. The impact can be significant. In general, three years after restructuring, growth is about 5 percent lower compared to countries that did not face restructuring over the same period. The exception is for final restructurings, which result in positive growth in the years immediately after the restructuring. Final restructurings tend to be better for growth because they reduce countries’ debt, with the strongest effect for countries that exit restructurings with relatively low debt levels.

Download or read book Restructuring Sovereign Debt written by Lex Rieffel and published by Rowman & Littlefield. This book was released on 2003-09-05 with total page 372 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Western powers established the International Monetary Fund (IMF) and the World Bank after World War II as "permanent machinery" to anchor the Bretton Woods system. When developing countries began experiencing debt problems in the late 1960s, the Paris Club took shape as "ad hoc machinery" to restructure debt from export credit agencies. A decade later the London Club process emerged to handle workouts of commercial bank debt. Restructuring debt in the form of bonds became an issue in the late 1990s in Argentina and several other nations, and the IMF recently proposed a permanent mechanism to deal with that challenge. Restructuring Sovereign Debt explains why ad hoc machinery would function more effectively in the Bretton Woods system. By describing in detail the origins and operations of the London Club and Paris Club, Lex Rieffel highlights the pragmatism and flexibility associated with ad hoc approaches. He also recalls earlier proposals for creating permanent debt restructuring machinery and the reasons why they were not adopted. Recognizing that the issue of sovereign debt workout is complex, Rieffel has provided a comprehensive and detailed exposition of this important policy issue. Rieffel's book is an important tool for policymakers and the public, particularly as the global community seeks to resolve the debt problems of countries as diverse as Argentina, Iraq, and Côte d'Ivoire.

Download or read book Insolvency Prospects Among Small and Medium Sized Enterprises in Advanced Economies written by Mr.Federico J Diez and published by International Monetary Fund. This book was released on 2021-04-02 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: The COVID-19 pandemic has increased insolvency risks, especially among small and medium enterprises (SMEs), which are vastly overrepresented in hard-hit sectors. Without government intervention, even firms that are viable a priori could end up being liquidated—particularly in sectors characterized by labor-intensive technologies, threatening both macroeconomic and social stability. This staff discussion note assesses the impact of the pandemic on SME insolvency risks and policy options to address them. It quantifies the impact of weaker aggregate demand, changes in sectoral consumption patterns, and lockdowns on firm balance sheets and estimates the impact of a range of policy options, for a large sample of SMEs in (mostly) advanced economies.