Forging a practical plan to improve our handling of sovereign debt crises

Wednesday, January 22, 2014 - 12:45 PM
Bruegel, Rue de la Charité 33, Brussels, Belgium
Jan 22

The 2008 financial crisis and subsequent developments in Europe and the United States have highlighted four major lacunae in our ad hoc approach to resolving sovereign debt crises: first, we lack a centre to drive continuous improvement in our processes for dealing with sovereign crises; second, we do not have a venue in which creditors and debtors can be brought together on a proactive basis to deal with incipient crises; third, once a crisis has taken hold, we need a reasonably automatic means to effect a standstill whilst solvency is assessed; and fourth, recent failures in activating collective action clauses (CACs) and rulings in NML vs Argentina complicate efforts to make a restructuring effective once its terms have been agreed. In this meeting, CIGI Senior Fellow Brett House will propose a practical plan of pragmatic, incremental steps that could be undertaken to address each of these gaps without requiring complicated treaty negotiations. House will review his proposal, joint with CIGI Senior Fellow Richard Gitlin, for a Sovereign Debt Forum (SDF) to facilitate faster, more effective and more efficient treatments of sovereign crises. He will explain how proposals for greater issuance of state-contingent sovereign debt, enhanced CACs and immunization of payments systems would complement the SDF.

This event is hosted at Bruegel and joimtly organized with The German Marshall Fund of the United States.

Event Speakers

Brett House is a CIGI Senior Fellow. Additionally, he is a Visiting Scholar at Massey College, University of Toronto and Lecturer in the Economics Department and a Senior Fellow at the Jeanne Sauvé Foundation at McGill University. His research looks at the effects of trade liberalization on growth, the rise of emerging markets, and options to improve sovereign debt restructuring. He is also an advisor to and partner in Tau+ Investment Management, a start-up impact fund.