A Rule of Law for Sovereign Debt
To avoid economic and political instability, governments sometimes need to restructure their debts. But, in the absence of an international rule of law for doing so, the world pays a higher price than it should: a poorly functioning debt market, marked by unnecessary strife and costly delays in addressing problems when they arise.
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NEW YORK – Governments sometimes need to restructure their debts. Otherwise, a country’s economic and political stability may be threatened. But, in the absence of an international rule of law for resolving sovereign defaults, the world pays a higher price than it should for such restructurings. The result is a poorly functioning sovereign-debt market, marked by unnecessary strife and costly delays in addressing problems when they arise.