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 (AP Photo/Richard Drew).
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 (AP Photo/Richard Drew).

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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Experts

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James M. Boughton

Senior Fellow

James M. Boughton is a CIGI senior fellow. 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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Martin Guzman

Senior Fellow

Martin Guzman is a CIGI senior fellow. He contributes to research on sovereign debt restructuring, specifically investigating the sovereign debt crises in Argentina and Greece. 

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James A. Haley

Senior Fellow

James A. Haley is a senior fellow at the Centre for International Governance Innovation and a Canada Institute global fellow at the Woodrow Wilson Center for International Scholars in Washington, DC.

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Gregory Makoff

Senior Fellow

CIGI Senior Fellow Gregory Makoff is researches issues in international financial policy, including the management of sovereign debt crises. He is an expert in sovereign debt and an experienced debt capital markets professional.

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Susan Schadler

Senior Fellow

Susan Schadler is a CIGI Senior Fellow. She is a former deputy director of the International Monetary Fund’s European Department. Her 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

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.

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Hongying Wang

Senior Fellow

Hongying Wang (王红缨) is a CIGI senior fellow and teaches political science at the University of Waterloo. She studies Chinese politics and foreign policy as well as international political economy. 

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Miranda Xafa

Senior Fellow

Miranda Xafa is a CIGI senior fellow. Miranda focuses on sovereign debt crises and drawing lessons from the Greek debt restructuring for future debt crises. Previously she served as a member of the executive board of the IMF in Washington, DC.

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