Rault The Legal Framework of Sovereign Debt Management

1. Auflage 2017
ISBN: 978-3-8452-8476-7
Verlag: Nomos
Format: PDF
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, Band 9, 278 Seiten, Format (B × H): 153 mm x 227 mm

Reihe: Schriften zur Restrukturierung

Historically, international financial crises do not occur in isolation but rather go hand in hand with the deterioration of macroeconomic indicators, investor panic and speculation. Since the beginning of the 20th century, experts in international law have periodically discussed the possible remedies to the endemic situation of sovereign indebtedness. In 2001, the International Monetary Fund launched a proposal for a Sovereign Debt Restructuring Mechanism known as the ‘Krueger Plan’; this was quickly abandoned in 2003. Due to the present economic and political cul-de-sac, the legal framework of sovereign debt management strongly preoccupies the international community. The current sovereign debt scenario necessarily involves an irreversible disruption of the legal rules and structures that currently support a proper functioning global economy. This doctoral thesis analyses the evolution of the legal framework and the normative choices favoured by each actor. By identifying particular legal issues that are essential to evaluate the subject’s complexity, it is possible to deepen the theoretical and practical suggestions designed to facilitate the resolution of sovereign debt crises. After establishing the leading international requirements for sovereign debt management, this dissertation advocates the implementation of a normative set of tools designed to integrate domestic regulations on the basis of previous models.

Autoren/Hrsg.

Rault, Charlotte Julie

Fachgebiete

• Wirtschaftswissenschaften Volkswirtschaftslehre Finanzkrisen, Wirtschaftskrisen
• Rechtswissenschaften Öffentliches Recht Wirtschaftsverwaltungsrecht / Öffentliches Wirtschaftsrecht Finanzverwaltung, Finanzverfassung, Finanzausgleich, allg. Haushaltsrecht
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Finanzkrisen
• Wirtschaftswissenschaften Volkswirtschaftslehre Öffentliche Finanzwirtschaft, Besteuerung

Inhaltsverzeichnis

1;Cover;1
2; Introduction;17
2.1; 1. The persistence of sovereign defaults;23
2.1.1; 1.1. The insolvency of sovereign borrowers;23
2.1.2; 1.2. The timelessness of modified debt crisis;26
2.1.3; 1.3. The absence of institutional mechanisms;28
2.2; 2. The place of international law in sovereign debt management;30
2.2.1; 2.1. The search of a legal framework;30
2.2.2; 2.2. The unsuccessful concrete proposals;32
2.2.3; 2.3. Determination of the field of study;33
3; PART I. SOVEREIGN DEBT – BETWEEN PUBLIC INTEREST AND PRIVATE INSTRUMENTS;37
3.1; Title I. CONTRACTUALISATION OF DEBT SUPPORTS;38
3.1.1; CHAPTER 1. Decline of International Financial Agreements;39
3.1.1.1; 1. Financial cooperation and debt policy;39
3.1.1.1.1; 1.1. International relations and interstate financial agreements;40
3.1.1.1.1.1; 1.1.1. Sovereign financial obligations and international law;40
3.1.1.1.1.2; 1.1.2. Economic diplomacy through financial agreements;46
3.1.1.1.2; 1.2. The termination of bilateral financial agreements;49
3.1.1.1.2.1; 1.2.1. The absence of an international conventional framework;50
3.1.1.1.2.2; 1.2.2. The challenge of international financial treaties;54
3.1.1.2; 2. Multilateral financial cooperation;58
3.1.1.2.1; 2.1. Multilateralisation of public financing;58
3.1.1.2.1.1; 2.1.1. Sovereign financing by the World Bank and the International Monetary Fund;58
3.1.1.2.1.2; 2.1.2. The objective of a sovereign debt management;62
3.1.1.2.2; 2.2. Regionalisation of sovereign financing;64
3.1.1.2.2.1; 2.2.1. Multiplication of public operators;64
3.1.1.2.2.2; 2.2.2. Entry of financial markets in international public finance;66
3.1.2; CHAPTER 2. Generalisation of Private Contracts through Banking Intermediation;68
3.1.2.1; 1. Banking intermediation in sovereign financing;68
3.1.2.1.1; 1.1. Private creditors versus sovereignty;68
3.1.2.1.1.1; 1.1.1. Historical intervention of private creditors;69
3.1.2.1.1.2; 1.1.2. Sovereign debtors through economic prism;71
3.1.2.1.2; 1.2. Emergence of international syndicated loan markets;74
3.1.2.1.2.1; 1.2.1. International syndicated loans financing sovereign debt;75
3.1.2.1.2.2; 1.2.2. Collapse of US banks and fear of contagion;77
3.1.2.2; 2. Privatisation of sovereign debt;79
3.1.2.2.1; 2.1. Private law and sovereign debt;79
3.1.2.2.1.1; 2.1.1. Contractual standardisation;79
3.1.2.2.1.2; 2.1.2. Managing sovereign risk;82
3.1.2.2.1.3; 2.1.3. Standard covenants applied to sovereign borrowers;84
3.1.2.2.2; 2.2. Disintermediation of debt market;87
3.1.2.2.2.1; 2.2.1. A debt system organised by private operators;87
3.1.2.2.2.2; 2.2.2. Disintermediation of debt products;88
3.1.3; Title I. CONCLUSION;91
3.2; Title II. IMPACT OF DEBT PRIVATISATION ON SOVEREIGN DEBT DEFAULT;92
3.2.1; CHAPTER 3. Financialisation of Sovereign Debt and Imposition of Market Practices;93
3.2.1.1; 1. Internationalisation of sovereign debt instruments;93
3.2.1.1.1; 1.1. Configuration of sovereign debt primary market;93
3.2.1.1.1.1; 1.1.1. Predominance of sovereign debt bonds;94
3.2.1.1.1.2; 1.1.2. Heterogeneous bond issuance practices;97
3.2.1.1.2; 1.2. Sovereign debt bonds on secondary markets;101
3.2.1.1.2.1; 1.2.1. A financial reference for markets;101
3.2.1.1.2.2; 1.2.2. Sovereign financing securitisation;103
3.2.1.2; 2. Internationalisation of sovereign debt operators;104
3.2.1.2.1; 2.1. Professionalisation of debt operators;104
3.2.1.2.1.1; 2.1.1. Concentration of operators and dispersion of investors;105
3.2.1.2.1.2; 2.1.2. Professionalisation of debt management;108
3.2.1.2.2; 2.2. States and international institutional regulators;111
3.2.1.2.2.1; 2.2.1. States and organisation of financial markets;111
3.2.1.2.2.2; 2.2.2. Debt management by central banks and supervisory authorities;112
3.2.2; CHAPTER 4. Reinforcement of Sovereign Debt Crises;113
3.2.2.1; 1. Sovereign debt crises;114
3.2.2.1.1; 1.1. From financial crisis to sovereign debt crisis;114
3.2.2.1.1.1; 1.1.1. Anatomy of the crisis and analysis of a contagion;115
3.2.2.1.1.2; 1.1.2. Result of a predictable situation;117
3.2.2.1.1.3; 1.1.3. Criteria of sovereign default on the financial market;119
3.2.2.1.2; 1.2. Challenges and pending questions;122
3.2.2.1.2.1; 1.2.1. Lack of international financial architecture;122
3.2.2.1.2.2; 1.2.2. Lack of lender of last resort for States;124
3.2.2.1.2.3; 1.2.3. Legal inconsistencies in sovereign financing;127
3.2.2.2; 2. Costs of default;129
3.2.2.2.1; 2.1. Restricted funding;129
3.2.2.2.1.1; 2.1.1. Financial, economic and commercial sanctions;130
3.2.2.2.1.2; 2.1.2. Political consequences;131
3.2.2.2.2; 2.2. Arbitrability of sovereign debt litigation;132
3.2.2.2.2.1; 2.2.1. End of sovereign immunity on debt matters;132
3.2.2.2.2.2; 2.2.2. Success of holdout creditors;135
3.2.3; Title II. CONCLUSION;139
3.3; PART I. CONCLUSION;140
4; PART II. PUBLICISATION OF SOVEREIGN DEBTMANAGEMENT;141
4.1; Title III. INSTITUTIONAL FRAMEWORK OF CONTRACTUAL INSTRUMENTS;143
4.1.1; CHAPTER 5. Choice of Contractual Measures for Debt Restructuring;143
4.1.1.1; 1. Ad hoc restructuring fora for collective processing;144
4.1.1.1.1; 1.1. Restructuring plans of the Paris and London Clubs;144
4.1.1.1.1.1; 1.1.1. The Paris Club, from restructuring to debt reduction;144
4.1.1.1.1.2; 1.1.2. The London Club, banking committees for restructuring;148
4.1.1.1.2; 1.2. Greek restructuring under the auspices of the Troika;151
4.1.1.1.2.1; 1.2.1. Towards the establishment of a European legal framework for restructuring;151
4.1.1.1.2.2; 1.2.2. Unequal contribution of private creditors;155
4.1.1.1.2.3; 1.2.3. Absence of formal hierarchy of creditors;157
4.1.1.2; 2. Contractual clauses and litigation;159
4.1.1.2.1; 2.1. Procedural issues of the Argentine Republic;159
4.1.1.2.1.1; 2.1.1. Holdout creditors before courts;159
4.1.1.2.1.2; 2.1.2. Alternative diplomatic methods;163
4.1.1.2.2; 2.2. Legal technicality and privatisation of sovereign debt litigation;166
4.1.1.2.2.1; 2.2.1. Clauses anticipating litigation;166
4.1.1.2.2.2; 2.2.2. Integration of collective action clauses;168
4.1.1.2.2.3; 2.2.3. Limits of contractual approach and ad hoc mechanisms;170
4.1.2; CHAPTER 6. International Financial Institutions and Rescheduling;171
4.1.2.1; 1. The International Monetary Fund, an ad hoc rescheduling regulator;172
4.1.2.1.1; 1.1. Mediator of renegotiations;173
4.1.2.1.1.1; 1.1.1. A financial mediator and a lender of last resort;173
4.1.2.1.1.2; 1.1.2. IMF and debt restructuring;178
4.1.2.1.2; 1.2. IMF proposals to manage restructuring;181
4.1.2.1.2.1; 1.2.1. The sovereign debt restructuring mechanism;181
4.1.2.1.2.2; 1.2.2. Renunciation to the sovereign debt restructuring mechanism;184
4.1.2.2; 2. International financial institutions and debt management;186
4.1.2.2.1; 2.1. Sovereign indebtedness versus development;186
4.1.2.2.1.1; 2.1.1. Initiators of debt management;187
4.1.2.2.1.2; 2.1.2. Debt renegotiation and debt relief;189
4.1.2.2.1.3; 2.2. Monitoring sovereign debt levels;192
4.1.3; Title III. CONCLUSION;196
4.2; Title IV. SOVEREIGN DEBT MANAGEMENT, AN INTERNATIONAL PRIORITY FOR STATES;197
4.2.1; CHAPTER 7. Global Debt Management and Framework Proposals;198
4.2.1.1; 1. Institutional action to restore financial multilateralism;198
4.2.1.1.1; 1.1. Strengthening international cooperation;199
4.2.1.1.1.1; 1.1.1. Status quo of the international consensus;199
4.2.1.1.1.2; 1.1.2. Promoting financial multilateralism;202
4.2.1.1.2; 1.2. Sharing good management practices;204
4.2.1.1.2.1; 1.2.1. International audits;204
4.2.1.1.2.2; 1.2.2. Towards an accounting of the overall debt level;206
4.2.1.2; 2. Defining rules to ensure stability;208
4.2.1.2.1; 2.1. Financial innovation for collective interest;208
4.2.1.2.1.1; 2.1.1. Modifying global finance;209
4.2.1.2.1.2; 2.1.2. Towards a regulation of European debt bonds;210
4.2.1.2.2; 2.2. A unique way to multilateral dispute settlement;211
4.2.1.2.2.1; 2.2.1. A mutualisation of benefits;211
4.2.1.2.2.2; 2.2.2. Towards a European crisis resolution framework;216
4.2.2; CHAPTER 8. Elaboration of an International Economic Law of Sovereign Indebtedness;218
4.2.2.1; 1. General principles for comprehensive operations;219
4.2.2.1.1; 1.1. Soft law and international financing law;220
4.2.2.1.1.1; 1.1.1. Codes of good conduct, reports and information sharing;220
4.2.2.1.1.2; 1.1.2. Towards a standardised debt management;221
4.2.2.1.2; 1.2. Soft law regulation of sovereign financing;223
4.2.2.1.2.1; 1.2.1. Soft law and international financial institutions;223
4.2.2.1.2.2; 1.2.2. Soft law and market professionals;226
4.2.2.1.2.3; 1.2.3. Soft law and the United Nations Conference on Trade and Development;230
4.2.2.2; 2. An imperfect law for sovereign debt management;233
4.2.2.2.1; 2.1. De-formalisation of international law;234
4.2.2.2.2; 2.2. Enhancing general principles;237
4.2.3; Title IV. CONCLUSION;241
4.3; PART II. CONCLUSION;242
5; GENERAL CONCLUSION;243
6; Bibliography;249