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Governing Sovereign Debt Restructuring Through Regulatory Standards

Author

Listed:
  • Brooks Skylar

    (University of Waterloo – Balsillie School of International Affairs, 67 Erb Street West, Waterloo, Ontario N2L 6C2, Canada; and Centre for International Governance Innovation – Global Economy, 67 Erb Street West, Waterloo, Ontario N2L 6C2, Canada)

  • Lombardi Domenico

    (Centre for International Governance Innovation – CIGI, 67 Erb Street West, Waterloo, Ontario N2L 6C2, Canada)

Abstract

In recent years, a number of costly and destabilizing sovereign debt crises – from Argentina and Greece to Ukraine – have served as a forceful reminder that the international community lacks an agreed-upon framework for resolving debt crises and, when necessary, restructuring sovereign debt in a timely, orderly, and equitable manner. To help address this apparent governance gap, the paper argues that there is an important but underutilized role for the Financial Stability Board (FSB) in governing sovereign debt restructuring. More specifically, in a governance domain that is relatively fragmented between uncoordinated, even sometimes competing, rules and rule-makers, the FSB could serve as the focal institution responsible for overseeing the coordination and further development of soft law regulatory standards for sovereign debt restructuring. The reasons for FSB governance in this domain are simple and compelling, relating to both the nature of the debt restructuring regime and its evolution to date, as well as the specific institutional features of the FSB and the core tasks it performs. Although there remains room for treaty-based organizations like the International Monetary Fund (IMF) and United Nations (UN) to develop a hard law approach to sovereign debt restructuring, the FSB, we argue, is best positioned to strengthen and oversee the existing soft law approach, which currently prevails as the modus operandi of the present debt restructuring framework.

Suggested Citation

  • Brooks Skylar & Lombardi Domenico, 2015. "Governing Sovereign Debt Restructuring Through Regulatory Standards," Journal of Globalization and Development, De Gruyter, vol. 6(2), pages 287-318, December.
  • Handle: RePEc:bpj:globdv:v:6:y:2015:i:2:p:287-318:n:5
    DOI: 10.1515/jgd-2015-0024
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    References listed on IDEAS

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    1. Antonio Bassanetti & Carlo Cottarelli & Andrea F Presbitero, 2019. "Lost and found: market access and public debt dynamics," Oxford Economic Papers, Oxford University Press, vol. 71(2), pages 445-471.
    2. Schwarcz Steven L., 2015. "Sovereign Debt Restructuring: A Model-Law Approach," Journal of Globalization and Development, De Gruyter, vol. 6(2), pages 343-385, December.

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