IDEAS home Printed from https://ideas.repec.org/a/bpj/globdv/v6y2015i2p287-318n5.html
   My bibliography  Save this article

Governing Sovereign Debt Restructuring Through Regulatory Standards

Author

Listed:
  • Brooks Skylar

    (University of Waterloo – Balsillie School of International Affairs, 67 Erb Street West, Waterloo, Ontario N2L 6C2, Canada; and Centre for International Governance Innovation – Global Economy, 67 Erb Street West, Waterloo, Ontario N2L 6C2, Canada)

  • Lombardi Domenico

    (Centre for International Governance Innovation – CIGI, 67 Erb Street West, Waterloo, Ontario N2L 6C2, Canada)

Abstract

In recent years, a number of costly and destabilizing sovereign debt crises – from Argentina and Greece to Ukraine – have served as a forceful reminder that the international community lacks an agreed-upon framework for resolving debt crises and, when necessary, restructuring sovereign debt in a timely, orderly, and equitable manner. To help address this apparent governance gap, the paper argues that there is an important but underutilized role for the Financial Stability Board (FSB) in governing sovereign debt restructuring. More specifically, in a governance domain that is relatively fragmented between uncoordinated, even sometimes competing, rules and rule-makers, the FSB could serve as the focal institution responsible for overseeing the coordination and further development of soft law regulatory standards for sovereign debt restructuring. The reasons for FSB governance in this domain are simple and compelling, relating to both the nature of the debt restructuring regime and its evolution to date, as well as the specific institutional features of the FSB and the core tasks it performs. Although there remains room for treaty-based organizations like the International Monetary Fund (IMF) and United Nations (UN) to develop a hard law approach to sovereign debt restructuring, the FSB, we argue, is best positioned to strengthen and oversee the existing soft law approach, which currently prevails as the modus operandi of the present debt restructuring framework.

Suggested Citation

  • Brooks Skylar & Lombardi Domenico, 2015. "Governing Sovereign Debt Restructuring Through Regulatory Standards," Journal of Globalization and Development, De Gruyter, vol. 6(2), pages 287-318, December.
  • Handle: RePEc:bpj:globdv:v:6:y:2015:i:2:p:287-318:n:5
    DOI: 10.1515/jgd-2015-0024
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/jgd-2015-0024
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    File URL: https://libkey.io/10.1515/jgd-2015-0024?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Martín Guzmán, 2015. "In the quest of a Framework for Sovereign Debt Restructuring," Documentos de trabajo del Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET) 2015-7, Universidad de Buenos Aires, Facultad de Ciencias Económicas, Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET).
    2. repec:ces:ifodic:v:11:y:2013:i:3:p:19099069 is not listed on IDEAS
    3. Kenneth Rogoff & Jeromin Zettelmeyer, 2002. "Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976-2001," IMF Staff Papers, Palgrave Macmillan, vol. 49(3), pages 1-8.
    4. Abbott, Kenneth W. & Snidal, Duncan, 2000. "Hard and Soft Law in International Governance," International Organization, Cambridge University Press, vol. 54(3), pages 421-456, July.
    5. Jonathan Eaton & Mark Gersovitz & Joseph E. Stiglitz, 1991. "The Pure Theory of Country Risk," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 391-435, National Bureau of Economic Research, Inc.
    6. Herman, Barry & Ocampo, Jose Antonio & Spiegel, Shari (ed.), 2010. "Overcoming Developing Country Debt Crises," OUP Catalogue, Oxford University Press, number 9780199578795.
    7. Raymond Ritter, 2009. "Transnational governance in global finance - the principles for stable capital flows and fair debt restructuring in emerging markets," Occasional Paper Series 103, European Central Bank.
    8. Anna Gelpern, 2013. "Sovereign Damage Control," Policy Briefs PB13-12, Peterson Institute for International Economics.
    9. Ritter, Raymond, 2009. "Transnational governance in global finance: the principles for stable capital flows and fair debt restructuring in emerging markets," Occasional Paper Series 103, European Central Bank.
    10. Anna Gelpern, 2013. "Sovereign Damage Control," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(3), pages 10-15, October.
    11. Anna Gelpern, 2013. "Sovereign Damage Control," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(03), pages 10-15, October.
    12. Eric Helleiner, 2008. "The Mystery of the Missing Sovereign Debt Restructuring Mechanism," Contributions to Political Economy, Cambridge Political Economy Society, vol. 27(1), pages 91-113.
    13. Frank Biermann & Philipp Pattberg & Harro van Asselt & Fariborz Zelli, 2009. "The Fragmentation of Global Governance Architectures: A Framework for Analysis," Global Environmental Politics, MIT Press, vol. 9(4), pages 14-40, November.
    14. Christoph Trebesch & Mr. Michael G. Papaioannou & Mr. Udaibir S Das, 2012. "Sovereign Debt Restructurings 1950-2010: Literature Survey, Data, and Stylized Facts," IMF Working Papers 2012/203, International Monetary Fund.
    15. Jonathan Eaton & Mark Gersovitz, 1981. "Debt with Potential Repudiation: Theoretical and Empirical Analysis," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(2), pages 289-309.
    16. Schwarcz Steven L., 2015. "Sovereign Debt Restructuring: A Model-Law Approach," Journal of Globalization and Development, De Gruyter, vol. 6(2), pages 343-385, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Antonio Bassanetti & Carlo Cottarelli & Andrea F Presbitero, 2019. "Lost and found: market access and public debt dynamics," Oxford Economic Papers, Oxford University Press, vol. 71(2), pages 445-471.
    2. Schwarcz Steven L., 2015. "Sovereign Debt Restructuring: A Model-Law Approach," Journal of Globalization and Development, De Gruyter, vol. 6(2), pages 343-385, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:bdi:opques:qef_143_01 is not listed on IDEAS
    2. Marco Committeri & Francesco Spadafora, 2013. "You never give me your money? Sovereign debt crises, collective action problems, and IMF lending," Questioni di Economia e Finanza (Occasional Papers) 143, Bank of Italy, Economic Research and International Relations Area.
    3. Schumacher, Julian & Trebesch, Christoph & Enderlein, Henrik, 2021. "Sovereign defaults in court," Journal of International Economics, Elsevier, vol. 131(C).
    4. Sourbron Leentje Ann & Vereeck Lode, 2017. "To Pay or Not to Pay? Evaluating the Belgian Law Against Vulture Funds," Journal of Globalization and Development, De Gruyter, vol. 8(1), pages 1-14, June.
    5. Eijffinger, Sylvester C.W. & Karataş, Bilge, 2023. "Three sisters: The interlinkage between sovereign debt, currency, and banking crises," Journal of International Money and Finance, Elsevier, vol. 131(C).
    6. Ugo Panizza & Federico Sturzenegger & Jeromin Zettelmeyer, 2010. "International Government Debt," UNCTAD Discussion Papers 199, United Nations Conference on Trade and Development.
    7. Nedelchev, Miroslav, 2015. "Coordination of banking regulation in the EU," MPRA Paper 66073, University Library of Munich, Germany, revised 2015.
    8. Laura Alfaro & Fabio Kanczuk, 2006. "Sovereign Debt: Indexation and Maturity," Research Department Publications 4459, Inter-American Development Bank, Research Department.
    9. Arora, Mohit, 2016. "Changing Rules of the Game of Global Finance: Glimpses from a Sovereign Debt Restructuring Episode," MPRA Paper 73181, University Library of Munich, Germany.
    10. Karatas, B., 2014. "Financial crisis and monetary policy," Other publications TiSEM 41e463f0-e122-4379-8db5-6, Tilburg University, School of Economics and Management.
    11. Pierre Villa, 1998. "Croissance et contrainte financière dans les pays en développement," Revue Économique, Programme National Persée, vol. 49(1), pages 103-117.
    12. Bracke, Thierry & Polgár, Éva Katalin & Buysse, Kristel & Rusinova, Desislava & Francart, Alexandre & Christensen, Jakob Eckholdt & Knobloch, Corinna & Stavrianou, Nikolaos & Diev, Pavel & Cocozza, Em, 2010. "Financial stability challenges in EU candidate countries - Financial systems in the aftermath of the global crisis," Occasional Paper Series 115, European Central Bank.
    13. Peter Rowland, 2004. "The Colombian Sovereign Spread and its Determinants," Borradores de Economia 315, Banco de la Republica de Colombia.
    14. C. Justin ROBINSON & Prosper F. BANGWAYO-SKEETE, 2017. "Market Efficiency, Sovereign Debt Restructuring And Credit Ratings In Developing Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 17(1), pages 5-18.
    15. Christoph Trebesch, 2019. "Resolving sovereign debt crises: the role of political risk," Oxford Economic Papers, Oxford University Press, vol. 71(2), pages 421-444.
    16. Patrick Bolton & Olivier Jeanne, 2009. "Structuring and Restructuring Sovereign Debt: The Role of Seniority -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(3), pages 879-902.
    17. Task Force of the Monetary Policy Committee of the ESCB, 2010. "Energy markets and the euro area macroeconomy," Occasional Paper Series 113, European Central Bank.
    18. Sinn, H.W., 1990. "American Economic Policy And The International Debt Crisis," Papers 61, Princeton, Woodrow Wilson School - Discussion Paper.
    19. Stijn Claessens & M. Ayhan Kose, 2013. "Financial Crises: Explanations, Types and Implications," CAMA Working Papers 2013-06, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    20. Tamon Asonuma & Christoph Trebesch, 2016. "Sovereign Debt Restructurings: Preemptive Or Post-Default," Journal of the European Economic Association, European Economic Association, vol. 14(1), pages 175-214, February.
    21. Alfaro, Laura & Kanczuk, Fabio, 2009. "Optimal reserve management and sovereign debt," Journal of International Economics, Elsevier, vol. 77(1), pages 23-36, February.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:globdv:v:6:y:2015:i:2:p:287-318:n:5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.