Filling a hole in global financial governance? The politics of regulating sovereign debt restructuring

The Politics of Global Regulation

Volumn , Issue , 2009, Pages 89-120

  Helleiner, Eric ^a  

^a UNIVERSITY OF WATERLOO   (Canada)

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[No Author keywords available]

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EID: 77955380387     PISSN: None     EISSN: None     Source Type: Book    
DOI: None     Document Type: Chapter

References (103)

1. Anne Krueger, International Financial Architecture for 2002: A New Approach to Sovereign Debt Restructuring, address given at the National Economists' Club Annual Members' Dinner, American Enterprise Institute, Washington, DC, November 26, 2001. Available at http://www.imf.org/external/np/speeches/2001/112601.htm.
2. Walter Mattli and Ngaire Woods, "In Whose Benefit? Explaining Regulatory Change in Global Politics," this volume.
3. Kenneth Rogoff and Jeromin Zettelmeyer, "Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976-2001," IMF Staff Papers 49, no. 3 (2002), 470- 507.
4. Paulo Mauro and Yishay Yafeh, The Corporation of Foreign Bondholders, IMF Working Paper no. 03/107 (Washington, DC: International Monetary Fund, 2003).
5. Charles Lipson, "Bankers' Dilemmas: Private Cooperation in Rescheduling Sovereign Debts," World Politics 38, no. 1 (1995), 200-225.
6. Susanne Soederberg, "The Transnational Debt Architecture and Emerging Markets: The Politics of Paradoxes and Punishment," Third World Quarterly 26, no. 6 (2005), 927-949
7. Lex Rieffel, Restructuring Sovereign Debt (Washington, DC: Brookings, 2003), chaps. 5-6.
8. Rieffel, Restructuring, 146
9. Rogoff and Zettelmeyer, "Bankruptcy Procedures"
10. Kathryn Lavelle, "Governing Sovereign Debt: Formal and Informal Alliances in Emerging Market Financial Politics." Paper presented to the annual meeting of the Canadian Association for the Study of International Development, June 2-4, 2005, London, Ontario, Canada.
11. Eric Helleiner, "The Mystery of the Missing Sovereign Debt Restructuring Mechanism," Contributions to Political Economy 27, no. 1 (2008).
12. Paul Blustein, The Chastening (New York: Public Affairs, 2001), 172-174
13. Robert Rubin and Jacob Weisberg, In an Uncertain World (New York: Random House, 2003)
14. Barry Eichengreen and Brad Delong, "Between Meltdown and Moral Hazard: Clinton Administration International Monetary and Financial Policy," in Jeffrey Frankel and Peter Orszag, eds., American Economic Policy in the 1990s (Cambridge, MA: MIT Press, 2002).
15. Rogoff and Zettelmeyer, "Bankruptcy Procedures." For the document, see Legal Department, "Note on an International Debt Adjustment Facility for Sovereign Debtors," May 25, 1995, IMF Archives, Washington DC.
16. For the IMF Board discussion, see "Minutes of the Executive Board Seminar 95/2, June 23, 1995," IMF Archives, Washington DC.
17. The Group of 10 involves financial policymakers from eleven countries: Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, the United Kingdom, and the United States.
18. "A Question from Argentina," Washington Post, December 11, 2001.
19. Rogoff and Zettelmayer, "Bankruptcy Procedures," 488.
20. Barry Eichengreen and Richard Portes, Crisis? What Crisis? Orderly Workouts for Sovereign Debtors (London: Centre for Economic Policy Research, 1995).
21. Reiffel, "Restructuring," 224;
22. Anna Gelpern and G. Mitu Gulati, "Public Symbol in Private Contract: A Case Study," Washington University Law Review 84 (2006), 1627-1715.
23. Blustein, The Chastening.
24. Ron Suskind, The Price of Loyalty: GeorgeW. Bush, the White House, and the Education of Paul O'Neill (New York: Simon&Schuster, 2004), 173, 175, 243-244
25. John Taylor, Global Financial Warriors (New York: Norton, 2007), 104.
26. Paul Blustein, And the Money Kept Rolling In (and Out) (New York: Public Affairs, 2005), 117-118.
27. U.S. House of Representatives, The State of the International Financial System and IMF Reform, Hearing before the Committee on Financial Services, U.S. House of Representatives, 107th Congress, 1st session, May 22, 2001 (Washington, DC: U.S. Government Printing Office, 2001), 8, 13-16;
28. Michael Sesit, "Who'll Blink First: Bush Administration or Bold Debtholders?" Wall Street Journal, February 16, 2001.
29. They had passed up an earlier opportunity in Turkey, which experienced a financial crisis in early 2001 and had received a large IMF loan.
30. U.S. Senate, Argentina's Economic Crisis. Hearing Before the Subcommittee on International Trade and Finance of the Committee on Banking, Housing and Urban Affairs, U.S. Senate, 107th Congress, 2nd session. February 28, 2002 (Washington, DC: Government Printing Office, 2002), 33.
31. Taylor, Global Financial Warriors, 93.
32. Sean Hagan, "Designing a Legal Framework to Restructure Sovereign Debt," Georgetown Journal of International Law 36, no. 2 (2005), 28.
33. Blustein, And the Money, 176-178.
34. Krueger, International Financial Architecture.
35. "Kohler's New Crew," The Economist, June 16, 2001.
36. Quote from Krueger, International Financial Architecture, 7.
37. Andy Haldane and Mark Kruger, The Resolution of International Financial Crises, Bank of Canada Working Paper 2001-20 (Ottawa: Bank of Canada, 2001).
38. Lavelle, "Governing Sovereign Debt";
39. Gelpern and Gulati, "Public Symbol."
40. U.S. Joint Economic Committee, Reform of the IMF and World Bank, Hearing Before the Joint Economic Committee, Congress of the United States, 107th Congress, 2nd session, February 14, 2002. (Washington, DC: U.S. Government Printing Office, 2002), 6.
41. Lavelle, "Governing Sovereign Debt";
42. Gelpern and Gulati, "Public Symbol";
43. Josef Ackermann, "Time to Strengthen Emerging Markets Finance," Financial Times, February 17, 2004.
44. Michele Wucker, "Searching for Argentina's Silver Lining," World Policy Journal 19, no. 4 (2002), 55
45. MartinWolf, "If the Debt Is Unpaid," Financial Times, March 8, 2004.
46. Ariel Buria, "The IMF at Sixty: An Unfulfilled Potential?" in Ariel Buira, ed., The IMF and World Bank at Sixty (London: Anthem, 2005), 20
47. Nouriel Roubini and Brad Setser, Bailouts or Bail-ins? (Washington, DC: Institute for International Economics, 2004), 196.
48. "IMF Sovereign Bankruptcy Plan Needs MoreWork, Conference Told," International Business and Finance Daily, January 27, 2003.
49. Lavelle, "Governing Sovereign Debt"; Gelpern and Gulati, "Public Symbol."
50. Taylor, Global Financial Warriors, chap. 4.
51. Jim Saxton, "IMF Sovereign Bankruptcy Supervision Is Unnecessary: New Analysis Rejects More IMF Mission Creep." Press Release, April 19, 2002 (Washington, DC: Chairman Jim Saxton, Joint Economic Committee, Congress of the U.S., 2002).
52. Ann Pettifor, Chapter 9/11 (London: Jubilee/New Economics Foundation, 2002).
53. Taylor, Global Financial Warriors, 128; Gelpern and Gulati, "Public Symbol."
54. International Monetary Fund, IMF Survey Supplement (Washington, DC: International Monetary Fund, 2003), 12;
55. International Monetary Fund, "Progress Report to the International Monetary and Financial Committee on Crisis Resolution," September 28, 2004 (Washington, DC: International Monetary Fund, 2004);
56. International Monetary Fund, "Progress Report to the International Monetary and Financial Committee on Crisis Resolution," September 21, 2005 (Washington, DC: International Monetary Fund, 2005).
57. John Taylor, "Sovereign Debt Restructuring: A U.S. Perspective, April 2, 2002" (Washington, DC: U.S. Treasury, 2002). Found at www.ustreas.gov/press/releases/po2056.htm.
58. Nicola's Eyzaguirre, Statement by the Honourable Nicola's Eyzaguirre, Minister of Finance of Chile Speaking on Behalf of the Southern Cone Countries (Washington, DC: IMF, International Monetary and Financial Committee, 2002).
59. Effie Psalida and Yan Liu, "IMF Promotes Wider Use of Collective Action Clauses," IMF Survey, June 2, 2003, 166-168.
60. Taylor quote from John Taylor, "The IMF's Virtuous Lona Cycle,"Wall Street Journal, April 19, 2006.
61. Taylor, Global Financial Warriors, chap. 4. See also Gelpern and Gulati, "Public Symbol."
62. Psalida and Liu, "IMF Promotes," 166-67.
63. Quote from American Enterprise Institute, Argentina: Economic Challenges in the Wake of Default. March 31 (Washington, DC: American Enterprise Institute, 2004), 4. Found at: www.aei.org/include/event_print.asp?eventID=767.
64. Lavelle, "Governing Sovereign Debt," 27.
65. Taylor, Global Financial Warriors, chap. 4.
66. www.emta.org/ndevelop/Final_merged.pdf.
67. Gelpern and Gulati, "Public Symbol."
68. Blustein, And the Money, 230. For further evidence, see Gelpern and Gulati, "Public Symbol."
69. Robert Gray, "Collective Action Clauses: The Way Forward." Unpublished paper, February 2004. Gray was from the International Primary Market Association.
70. Helen Thompson and David Runciman, "Sovereign Debt and Private Creditors," New Political Economy 11, no. 4 (2006), 541-555.
71. Barry Herman, "Mechanisms for Dialogue and Debt-Crisis Workout that Can Strengthen Sovereign Lending to Developing Countries," in Ariel Buira, ed., Challenges to the World Bank and IMF (London: Anthem, 2003).
72. Andrew Cooper and Bessma Momani, "Negotiating Out of Argentina's Financial Crisis," New Political Economy 10, no. 3 (2005), 305-320.
73. Gelpern and Gulati ("Public Symbol") cite evidence that the first-model CAC to be proposed by a privatesector association (the Emerging Markets Creditors Association) in May 2002 reflected frustration with the Argentine situation.
74. Mattli and Woods, "In Whose Benefit? Explaining Regulatory Change in Global Politics," this volume.
75. Dierdre Kamlani, Systemic Change, Structural Power and Sovereign Bankruptcy Regimes (1982 -2005), M.Sc. (Politics of theWorld Economy), London School of Economics, 2005.
76. Gelpern and Gulati ("Public Symbol") also note the concern that a higher threshold might have been perceived by the markets as a sign of Mexican weakness.
77. Brazil used 85 percent in its April 2003 issue, but shifted later to 75 percent.
78. www.emta.org/ndevelop/Final_merged.pdf.
79. Alonso Garcia Tames, "New Hopes for Debt Crisis Avoidance," The Banker, February 1, 2005. Trichet later highlighted that he drew inspiration from the nonbinding agreements struck within the Paris Club
80. Paris Club Secretariat, Fifty Years of Orderly Sovereign Debt Restructuring. Proceedings of the International Policy Forum, June 14, 2006 (Paris: Paris Club Secretariat, 2006), 75.
81. Bank of France proposal for a "Code of Good Conduct" in January 2003: Bank of France, Towards a Code of Good Conduct on Sovereign Debt Re-Negotiation (Paris: Bank of France, 2003).
82. Andrew Balls, "IIF Seeks Extra Support for Fair Debt Restructuring Principles," Financial Times, January 18, 2005.
83. Josef Ackermann, "Time to Strengthen Emerging Markets Finance," Financial Times, February 17, 2004.
84. "G20 Voluntary Code of Conduct on Debt Restructuring Leaves Argentina Isolated," Financial Times, November 22, 2004.
85. The Principles can be found at www.iif.com/data/public/principles_1104.pdf.
86. Josef Ackermann, "Precautionary Principles," Wall Street Journal, April 14, 2005, A18.
87. Andrew Balls, "IIF Seeks Extra Support."
88. Alonso Garcia Tames, "New Hopes for Debt Crisis Avoidance," The Banker, February 1, 2005.
89. Group of 20, "Communique: Meeting of Finance Ministers and Central Bank Governors," Berlin, November 20-21, 2004, p. 2.
90. Principles Consultative Group, Report on Implementation (Washington, DC: Institute of International Finance, 2006), 2.
91. The IMF had been allowed to "lend into arrears" vis-à -vis bank debt since 1989 and bond debt since 1998.
92. Diana Gregg, "IIF 'Principles' for Emerging Markets Aim to Ease Crises, Improve Debt Process," International Business and Finance Daily, November 23, 2004.
93. IIF press release, "Emerging market sovereign bond issuers strengthen investor relations and release more key data, but numerous countries still fall short of market needs," December 8, 2005.
94. Its co-chairs were Trichet, Toyoo Gyohten (former Vice-Minister of Finance in Japan)
95. Henrique de Campos Meirelles (Governor of the Central Bank of Brazil).
96. IIF Press Release, "Trichet, Meirelles and Gyohten to lead new group of trustees for emerging markets finance initiative," March 30, 2006.
97. Principles Consultative Group, Report, 7, 13.
98. Principles Consultative Group, Report.
99. Anne Marie Slaughter, A NewWorld Order (Princeton, NJ: Princeton University Press, 2005).
100. Layna Mosely, "Privatizing Global Governance? Dilemmas in International Financial Regulation." Paper presented at De Nederlandsche Bank, Amsterdam, September 27, 2006
101. Tony Porter, Globalization and Finance (Cambridge: Polity, 2005).
102. Claire Cutler, Virginia Haufler, and Tony Porter, eds., Private Authority and International Affairs (Buffalo: State University of New York Press, 1999).
103. Daniel Drezner, All Politics Is Global (Princeton, NJ: Princeton University Press, 2007).