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Too Little, Too LateThe Quest to Resolve Sovereign Debt Crises$
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Martin Guzman, José Antonio Ocampo, and Joseph E. Stiglitz

Print publication date: 2016

Print ISBN-13: 9780231179263

Published to Columbia Scholarship Online: January 2017

DOI: 10.7312/columbia/9780231179263.001.0001

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Creditor Committees in Sovereign Debt Restructurings

Creditor Committees in Sovereign Debt Restructurings

Understanding the Benefits and Addressing Concerns

(p.175) Chapter 9 Creditor Committees in Sovereign Debt Restructurings
Too Little, Too Late

Timothy B. DeSieno

Columbia University Press

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.

Keywords:   Debt contracts, Coase, Sovereign Debt Restructuring

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