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Sovereign Debt
When a nation's sovereign debt becomes unsustainable, prompt and fair restructuring is essential for both debtors and creditors. Complex, protracted processes often yield unfavorable outcomes, impeding recovery and creditor payments. The equitable distribution of debt relief remains a significant challenge. In contrast to corporate and sub-national public sector bankruptcies with structured legal procedures, sovereign insolvency in developing countries relies on informal, voluntary practices influenced by international relations and politics.
Joseph Stiglitz, Nobel Prize winning economist, University Professor, and IGP Faculty Advisory Board member, and Martín Guzmán, former Minister of Economy of Argentina and IGP Affiliated Faculty member, are together committed to addressing sovereign debt crises in developing countries around the world, especially across the Global South. Stiglitz and Guzmán have been collaborating on this issue for some time, and are now advancing these efforts under the auspices of the Institute of Global Politics.
Event Highlight
Sovereign Debt - NY Legislation
There is an emerging effort to legislate a framework for facilitating negotiations and guiding the outcomes of sovereign debt crises. New York law, which governs nearly half of developing countries' external sovereign debt to private creditors, plays a significant role in this development. During the 2023 legislative session, three bills were introduced in both the New York State Assembly and the New York State Senate to address some of these sovereign debt restructuring concerns and to improve the private sector's involvement in dealing with sovereign debt issues.
EVENT HIGHLIGHT
Sovereign Debt - IMF Lending Rate Policy in Marrakech
When a nation's sovereign debt becomes unsustainable, prompt and fair restructuring is essential for both debtors and creditors. Complex, protracted processes often yield unfavorable outcomes, impeding recovery and creditor payments. The equitable distribution of debt relief remains a significant challenge.
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