As with previous sovereign crises, the euro zone crisis has shown the need for a clear framework for dealing with severe sovereign debt crises. This framework must achieve the following targets: setting the right incentives for policy makers by containing moral hazard; clarifying the burden sharing between domestic actors and international lenders; and, ensuring efficient risk pricing through predictability in the restructuring of claims.

In this vein, CIGI’s Management of Severe Sovereign Debt Crises research theme explores some innovative approaches to debt restructuring, leveraging on the incentives that market participants may have in adopting them. Its research agenda also focuses on the reforms required for the lending framework of the International Monetary Fund (IMF), to ensure that its financial assistance is consistent with, and unequivocally signals, the sustainability of the borrower’s policies.

One focus of the research is the articulation of a set of incremental policy proposals that could meaningfully improve efforts to deal with sovereign crises and restore troubled sovereigns to market access and sustained growth. Chief among these is a Sovereign Debt Forum (SDF) that would provide a centre for continuous improvement of the processes for dealing with financially distressed sovereigns and a venue for proactive discussions between debtors and creditors to reach earlier and more effective understandings on the treatment of specific sovereign crises.

Another aspect of the research examines the choices facing the IMF during the euro zone crisis and the actual path taken. It reflects on and proposes institutional arrangements that can best grant the IMF sufficient flexibility to respond quickly to crises and ensure the independence of the IMF in assessing the most efficient way to resolve a future debt crisis. 

A third focus is on the background to the 2012 Greek debt restructuring, including the March debt exchange and December debt buyback  and the lessons learned on the timing and nature of the restructuring.

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The Evolution of Bonding Technology, Creditor Committees and the IMF

Experts

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James M. Boughton

CIGI Senior Fellow

James M. Boughton is a CIGI Senior Fellow. He is a former historian of the International Monetary Fund (IMF), a role he held from 1992 to 2012. From 2001 to 2010, he also served as assistant director in the Strategy, Policy, and Review Department at the IMF. At CIGI, James’s research focuses on the evolution of Canada’s role in international governance since the 1940s and the potential for further evolution in the near future.

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Richard Gitlin

CIGI Senior Fellow

Richard Gitlin is a CIGI Senior Fellow. An international bankruptcy lawyer, he played a leading role in the development of practices and procedures for successfully resolving complex global restructuring and insolvency cases. He has helped many countries improve their bankruptcy laws, including Canada, Republic of Korea, Indonesia and Mexico.

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Martin Guzman

CIGI Senior Fellow

Martin Guzman is a senior fellow with the Global Economy Program. At CIGI, Martin contributes to research on sovereign debt restructuring, specifically investigating the sovereign debt crises in Argentina and Greece. Martin is a Research Associate at the Department of Economics and Finance at Columbia University Business School, and associate professor at the University of Buenos Aires.

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James A. Haley

CIGI Senior Fellow

James A. Haley has been a CIGI senior fellow since September 2014.  He is adjunct professor at the McCourt School of Public Policy at Georgetown University in Washington, DC.

Domenico Lombardi

Domenico Lombardi

Director of the Global Economy Program

Domenico Lombardi is director of the Global Economy Program and a member of the executive management committee at the Centre for International Governance Innovation (CIGI). He also serves on the advisory boards of the Peterson Institute for International Economics and the Bretton Woods Committee in Washington, and is a member of the Steering Committee of the Asian Economic Panel.

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Gregory Makoff

CIGI Senior Fellow

CIGI Senior Fellow Gregory Makoff is currently researching issues in international financial policy, including the management of sovereign debt crises. As an expert in sovereign debt and an experienced debt capital markets professional, Mr. Makoff’s transaction advisory experience will inform his work with CIGI on sovereign debt.

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Susan Schadler

CIGI Senior Fellow

Susan Schadler is a CIGI Senior Fellow. She is a former deputy director of the International Monetary Fund’s European Department, where she led surveillance and lending operations to several countries and managed a number of research teams working on European issues. Her current research interests include the sovereign debt crisis, global capital flows, global financial institutions and growth models for emerging market economies.

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Pierre Siklos

CIGI Senior Fellow

Pierre Siklos is a CIGI senior fellow. His research interests include applied time series analysis and monetary policy, with a focus on inflation and financial markets. Pierre is a research associate at Australian National University’s Centre for Macroeconomic Analysis and a senior fellow at the Rimini Centre for Economic Analysis.

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Hongying Wang

CIGI Senior Fellow

Hongying Wang (王红缨)is a CIGI Senior Fellow. She is also associate professor of political science at the University of Waterloo, specializing in international political economy and East Asian politics. At CIGI, Hongying is focusing on the limits of the exchange rate mechanism in addressing China’s role in global imbalances and China’s role in several areas of global economic governance.

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Miranda Xafa

CIGI Senior Fellow

Miranda Xafa is a CIGI Senior Fellow. She is also chief executive officer of E.F. Consulting, an Athens-based advisory firm focusing on euro zone economic and financial issues. At CIGI, Miranda focuses on sovereign debt crises and drawing lessons from the Greek debt restructuring for future debt crises. From 2004 to 2009, she served as a member of the Executive Board of the International Monetary Fund in Washington.

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