Consultation Questions – New Rules for Global Finance Coalition

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Consultation Questions

There are various issues in the debate on sovereign debt. Below are a few key questions which address some of these issues. We invite you to respond to these questions (just one or all of them). We also invite you to suggest other questions that need to be answered. All feedback will be included in this consultation’s final report and published on the consultation website. Please share your responses, recommendations or ideas to Nathan Coplin at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . 

• In terms of sovereign debt restructuring, what new lessons has the euro zone crisis offered? How can these lessons be learned to help prevent or manage future crises?
• What are the main challenges that arise from the Argentina litigation? How might states and markets respond to these challenges?
• What types of legal contracts should govern sovereign debt obligations? What types of provisions might they include? 
• What are the potential costs and benefits of reforming the international debt architecture? In a globalized financial system, are sovereign debt crises inevitable and bound to be costly, or are there certain types of reforms that could reduce the frequency and costliness of such crises?
• How can we best balance the different distributional concerns that arise from sovereign debt and sovereign debt restructuring?
• Are lenders and borrowers equally (or differentially) responsible for the buildup of unsustainable debt? What does that imply for burden-sharing in the resolution of sovereign debt crises?
• How would you assess the pros and cons of the contractual and the statutory approaches respectively? What about the arbitration approach?
• Ostensibly, the statutory and contractual approaches seek to do many of the same things (overcome collective action problems, prevent individual bondholders from pursuing litigation, facilitate agreement on restructuring terms amongst a (super) majority of bondholders). What, then, are the real substantive differences between these two approaches? Why is one seen as more ambitious and politically unrealistic?
• Does the arbitration approach fall somewhere in between the statutory and contractual approaches? Which actors are likely to support and oppose each of these approaches? Why?
• From both a political and an economic point of view, how would you assess the pros and cons of the various proposals on the table?
• Does the IMF’s proposal go far enough toward resolving the core problems associated with sovereign debt management and sovereign debt restructuring?
• If debt reprofiling would have a similar effect as “sovereign cocos,” which approach is preferable and why?