Mrs. Anne Krueger, First Deputy Manager of the IMF, on temporary standstill on repayment of sovereign debts, analogy with US bankruptcy procedures and the cost of restructuring:
For creditors, our new approach might appear unattractive if it meant that debt problems were more likely to be dealt with through restructuring than through large bailouts from the official
sector. But most creditors now accept that official financing is limited and that the choice is not between workout and bailout, but between an orderly restructuring and a disorderly one. For most creditors the guarantee of an orderly restructuring is much to be preferred to the threat of a disorderly one. The value of their claims on the secondary market is unlikely to fall anywhere near as much is it does now when a country starts to get into trouble.
... The political imponderable is whether our members are prepared to constrain the ability of their citizens to pursue foreign governments through their national courts as an investment in a more stable - and therefore more prosperous - world economy. This, ultimately, is a matter for them.
I for one hope that they are - and I know that in time they will have to. I hope they will sometime soon. Thank you.
Her speech at the National Economist`s Club Annual Member`s Dinner
Why should the foreign creditors of Argentina take a greater
hit/haircut than the domestic ones:
On the economic logic, efficiency, fairness and legality of “discriminating” between domestic and foreign debt in sovereign debt restructurings (December 14, 2001.doc)
by Nouriel Roubini / Stern School of Business NYU
Solving Sovereign Debt Overhang
by Internationalising Chapter 9 Procedures
By Kunibert Raffer / University of Vienna
The Economist: Most of the benefits of America`s productivity growth have not gone into companies`pockets