Sovereign Debt Restructuring, Refinancing and the Financial Market

Accounting, Economics, and Law: A Convivium. Volume 6, Issue 3, December 2016, Pages 179–188. DOI: 10.1515/ael-2016-0024

Posted: 27 Feb 2017 Last revised: 4 Mar 2017

See all articles by Yuri Biondi

Yuri Biondi

French National Center for Scientific Research (CNRS)

Date Written: December 15, 2016

Abstract

Lienau’s book on ‘Rethinking Sovereign Debt’ delves into international finance to shed light on its background rules, overarching ideologies and interacting actors, disentangling the social norm of sovereign debt continuity and its institutional foundations. What a formalistic legal reasoning would interpret as a self-contained bilateral contract is then situated in historical time and social space populated by a variety of actors (debtors and creditors), co-existing legal regimes and evolving principles of reference. Her focus on odious debt highlights situations where debt continuity is challenged by major events in the sovereign borrower status (such as major political regime change, corruption and human rights abuse) which challenge debt legitimacy. This comment expands on her thoughtful analysis by linking debt continuity to the borrowing sovereign entity as a going concern. Sovereign borrowing makes lenders involved with this ongoing entity through time and circumstances. Ongoing sovereign debt management is featured by both debt securities market trading and the refinancing mechanism. In turn, refinancing involves public finances with their public benefit missions, central banking and the monetary base management. In this context, socially responsible lending and borrowing may be facilitated by acknowledging the bonding relationship between the borrowing sovereign entity and its creditors, including when default occurs.

Keywords: Sovereign Debt, Public Debt Management, Sovereign Debt Restructuring, Fiscal Consolidation, International Financial Law

JEL Classification: F34, F42, F53, H63, E61, K22, K33, D78, E44, E65, G18, H12

Suggested Citation

Biondi, Yuri, Sovereign Debt Restructuring, Refinancing and the Financial Market (December 15, 2016). Accounting, Economics, and Law: A Convivium. Volume 6, Issue 3, December 2016, Pages 179–188. DOI: 10.1515/ael-2016-0024. Available at SSRN: https://ssrn.com/abstract=2923616

Yuri Biondi (Contact Author)

French National Center for Scientific Research (CNRS) ( email )

IRISSO - University Paris Dauphine PSL
Place Marechal Lattre Tassigny
75016 Paris
France

HOME PAGE: http://yuri.biondi.free.fr/

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