You Never Give Me Your Money? Sovereign Debt Crises, Collective Action Problems, and IMF Lending

54 Pages Posted: 2 Feb 2013

See all articles by Marco Committeri

Marco Committeri

Banca d'Italia

Francesco Spadafora

Bank of Italy; International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: January 30, 2013


We review the impact of the global financial crisis, and its consequences for the sovereign sector of the euro area, on the international “rules of the game” for dealing with sovereign debt crises. These rules rest on two main pillars. The most important is the IMF’s lending framework (policies, financing facilities, and financial resources), which is designed to support macroeconomic adjustment packages based on the key notion of public debt sustainability. The complementary pillar is represented by such contractual provisions as Collective Action Clauses (CACs) in sovereign bonds, which aim to facilitate coordination among private creditors in order to contain the costs of a debt default or restructuring. We analyze the most significant changes (and their consequences) prompted by the recent crises to the Fund’s lending framework, not only in terms of additional financial resources, new financing facilities (including precautionary ones), and cooperation with euro-area institutions, but also as regards the criteria governing exceptional access to the Fund’s financial resources. We highlight a crucial innovation to these criteria, namely that, for the first time, they now explicitly take account of the risk of international systemic spillovers. Finally, we underscore the need for improved collective governance of systemic fiscal risks, with greater discipline in public finances and market monitoring, expansion of existing financial safety nets, accelerated dissemination of CACs, and new tools to sever the link between sovereign and banking risks.

Keywords: collective action clauses, sovereign debt restructuring, IMF financing, systemic spillovers

JEL Classification: F33, F34

Suggested Citation

Committeri, Marco and Spadafora, Francesco, You Never Give Me Your Money? Sovereign Debt Crises, Collective Action Problems, and IMF Lending (January 30, 2013). Bank of Italy Occasional Paper No. 143. Available at SSRN: or

Marco Committeri (Contact Author)

Banca d'Italia ( email )

Via Nazionale 91
Rome, 00184

Francesco Spadafora

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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