A birds-eye view of the CIGI-INET sovereign debtors conference (Lisa Malleck/CIGI Photo).
A birds-eye view of the CIGI-INET sovereign debtors conference (Lisa Malleck/CIGI Photo).

Okay, at the CIGI-INET conference on sovereign debt restructuring; not school. A few quick observations:

First, while  some remain wary of the concept, most people are generally supportive of the SDRM. Also, for those who have followed the SDRM debate over the past decade or more, I heard the clearest distinction yet between SDRM I and SDRM II (although I'm not sure everyone would agree): the first prototype had provisions for debt discharge analogous to domestic provisions for reducing households' debts that are clearly not sustainable, as well as means to promote creditor coordination; the second version only the measures to facilitate creditor coordination.

Second, people are decidedly pessimistic about the prospects for Greece. The chances of Greece avoiding default are not high, meaning more losses for holders of the restructured debt. The most optimistic interpretation: Europe is buying time to ring-fence and prepare their banks. This reminds me of the Latin American debt crisis of the 1980s and leads me to ask: Is a Brady-bond solution for Europe on the horizon? But who would lead the process as Treasury Secretary Brady did?

Third, expectations for something to come out of the G-20 Finance Ministers' and Central Bank Governors' meeting in Mexico are low. I say this not because anyone said as much, but because the meeting is completely off the radar screen.

All in all, an interesting day with very good discussions. Let's see what tomorrow brings.

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