A Model-law Approach to Restructuring Unsustainable Sovereign Debt

CIGI Policy Brief No. 64, August 2015, Updated October 2017

Duke Law School Public Law & Legal Theory Series No. 2015-41

9 Pages Posted: 24 Aug 2015 Last revised: 19 Oct 2017

Date Written: October 18, 2017

Abstract

Unresolved sovereign debt problems are hurting debtor nations, their citizens and their creditors, and also can pose serious systemic threats to the international financial system. The existing contractual restructuring approach is insufficient to make sovereign debt sustainable. Although a more systematic legal resolution framework is needed, a formal multilateral approach, such as a treaty, is not currently politically viable. An informal model-law approach should be legally, politically and economically feasible. Individual countries could enact the proposed model law as their domestic law. Because most sovereign debt contracts are governed by either New York or English law, it would be especially valuable if one or both of those jurisdictions enacted a proposed Sovereign Debt Restructuring Model Law as their domestic law.

JEL Classification: H6

Suggested Citation

Schwarcz, Steven L., A Model-law Approach to Restructuring Unsustainable Sovereign Debt (October 18, 2017). CIGI Policy Brief No. 64, August 2015, Updated October 2017; Duke Law School Public Law & Legal Theory Series No. 2015-41. Available at SSRN: https://ssrn.com/abstract=2649610

Steven L. Schwarcz (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States
919-613-7060 (Phone)
919-613-7231 (Fax)

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