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The Role of the IMF in Future Sovereign Debt Restructurings

15 Pages Posted: 26 Nov 2013 Last revised: 25 Dec 2014

Douglas G. Baird

University of Chicago Law School

Nicole Bollen

Ministry of Foreign Affairs, Netherlands

Lee C. Buchheit

Cleary Gottlieb Steen & Hamilton LLP - New York Office

G. Mitu Gulati

Duke University School of Law

Anne O. Krueger

Johns Hopkins University

Fridrik Mar Baldursson

Reykjavik University

Robert K. Rasmussen

University of Southern California Gould School of Law

David A. Skeel Jr.

University of Pennsylvania Law School; European Corporate Governance Institute (ECGI)

Sergei Storchak

Ministry of Finance of the Russian Federation

Jeromin Zettelmeyer

Peter G. Peterson Institute for International Economics; CEPR

Date Written: December 10, 2013

Abstract

A meeting of international finance and insolvency experts was held on November 2, 2013 at the Annenberg House in Santa Monica, California. The meeting was co-hosted by the USC Law School and the Annenberg Retreat at Sunnylands. The goal was to solicit the views of experts on the implications of the IMF’s April 26, 2013 paper captioned “Sovereign Debt Restructuring -- Recent Developments and Implications for the Fund’s Legal and Policy Framework”. The April 26 paper may signal a shift in IMF policies in the area of sovereign debt workouts. Although the Expert Group discussed a number of the ideas contained in the April 26 paper, attention focused on paragraph 32 of that paper. That paragraph states in relevant part:

“There may be a case for exploring additional ways to limit the risk that Fund resources will simply be used to bail out private creditors. For example, a presumption could be established that some form of a creditor bail-in measure would be implemented as a condition for Fund lending in cases where, although no clear-cut determination has been made that the debt is unsustainable, the member has lost market access and prospects for regaining market access are uncertain.”

This Report summarizes the consensus views of the Expert Group on the practical implications of the suggestions contained in paragraph 32 of the April 26 paper.

Keywords: International Monetary Fund, Sovereign Debt

JEL Classification: F3

Suggested Citation

Baird, Douglas G. and Bollen, Nicole and Buchheit, Lee C. and Gulati, G. Mitu and Krueger, Anne O. and Baldursson, Fridrik Mar and Rasmussen, Robert K. and Skeel, David A. and Storchak, Sergei and Zettelmeyer, Jeromin, The Role of the IMF in Future Sovereign Debt Restructurings (December 10, 2013). USC CLASS Research Paper No. CLASS 13-6; USC Law Legal Studies Paper No. 13-19. Available at SSRN: https://ssrn.com/abstract=2360274 or http://dx.doi.org/10.2139/ssrn.2360274

Douglas G. Baird

University of Chicago Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773-702-9571 (Phone)
773-702-0730 (Fax)

Nicole Bollen

Ministry of Foreign Affairs, Netherlands ( email )

Bezuidenhoutseweg 67
PO Box 20061
Hague, 2500
Netherlands

Lee C. Buchheit

Cleary Gottlieb Steen & Hamilton LLP - New York Office ( email )

One Liberty Plaza
New York, NY 10006-1470
United States

Gaurang Mitu Gulati (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Anne O. Krueger

Johns Hopkins University ( email )

Fridrik Mar Baldursson

Reykjavik University ( email )

Menntavegur 1
Reykjavik, 101
Iceland
354-8256396 (Phone)
354-5996201 (Fax)

HOME PAGE: http://www.ru.is/starfsfolk/fmb

Robert K. Rasmussen

University of Southern California Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089-0071
United States
213-740-6473 (Phone)
213-740-5502 (Fax)

David A. Skeel Jr.

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-573-9859 (Phone)
215-573-2025 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Sergei Storchak

Ministry of Finance of the Russian Federation ( email )

Moscow
Russia

Jeromin Zettelmeyer

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

CEPR ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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