1. The Sovereign Debt Forum: Expanding Our Tool Kit for Handling Sovereign Crises
- Author:
- Richard Gitlin and Brett House
- Publication Date:
- 08-2013
- Content Type:
- Policy Brief
- Institution:
- Centre for International Governance Innovation
- Abstract:
- A sovereign debt forum (SDF) would assist in facilitating more predictable, transparent and timely treatments of sovereign crises during future episodes of debt-servicing difficulties. An SDF would provide a non-statutory, neutral standing body to identify lessons from past episodes of sovereign distress, maintain information on sovereign debt and convene stakeholders to engage in confidential discussions at the outset of a sovereign crisis. The SDF proposal takes inspiration from existing precedents, such as the Paris Club and Vienna Initiative, which demonstrate that informal, rules-based representative entities have a long-standing history of organizing effective workouts for distressed countries An SDF would have a limited remit: to enable early, discreet consultation and information sharing between distressed sovereigns and their creditors to speed the process by which a sovereign is returned to solvency, stability and growth. An SDF would not supersede existing institutions and would rely on close collaboration with the International Monetary Fund (IMF). An SDF would complement other proposals for automatic maturity extensions on securitized debt, arbitration and mediation processes, voluntary standstills and improved aggregation in collective action clauses (CACs). The SDF and other incremental, pragmatic proposals to improve sovereign crisis management should be put at the core of the G20 agenda on an ongoing basis.
- Topic:
- Economics, Financial Crisis, and Governance