1. Why the Code of Conduct for Resolving Sovereign Debt Crises Falls Short
- Author:
- Barry Herman
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- The New School Graduate Program in International Affairs
- Abstract:
- The Institute of International Finance, a bankers group, has promoted its “Principles for Stable Capital Flows and Fair Debt Restructuring” as a code of conduct for debtor governments and their private creditors to avoid and if necessary resolve sovereign defaults. Although drafted with Brazil, Korea, Mexico and Turkey, I argue this purely voluntary code is excessively creditor friendly. Instead, a more balanced code should be developed in a broad, open and politically legitimate forum, and be coupled with an international disciplining mechanism that pushes creditors and debtor to a negotiated outcome under the code. A suggested approach concludes the paper.
- Topic:
- Development, Economics, International Trade and Finance, and Foreign Aid
- Political Geography:
- Turkey, Brazil, Korea, and Mexico