Advertisement

Sovereign Borrowing and Debt: Legal Implications

  • Rumu Sarkar
Chapter
  • 10 Downloads

Abstract

The following discussion of the international financial architecture explores four separate areas of international finance that are fundamentally interconnected: international borrowing practices, privatization, emerging capital economies, and the corruption of international capital markets. Considered together, these are the fundamental aspects of the underlying international financial architecture that supports (and undercuts) the development process globally. From a larger perspective, this part of the text is also dedicated to the idea of structural legal reform. Accordingly, this section focuses on global finance and the underlying legal structures that support it (or not, as the case may be). Changes in the legal architecture greatly affect the process and potential success of development, and the state plays a pivotal role in this.

References

  1. Aggarwal V (1990) Foreign debt: the mexican experience. Relazionio Internationali, pp. 26–33Google Scholar
  2. Ahdieh R (2003) Making markets: network effects and the role of law on the creation of strong securities markets. Calif Law Rev 76:277, 284, 322–328Google Scholar
  3. Arner D (2007) Financial stability, economic growth, and the role of law. Cambridge University Press, Cambridge, p 91CrossRefGoogle Scholar
  4. Asherman J (1984) The international monetary fund: a history of compromise. Int Law Policy 16:235Google Scholar
  5. Boyd B (1988) The development of a global market-based debt strategy to regulate private lending to developing countries. Ga J Int Comp. Law 18:461, 464Google Scholar
  6. Buchheit L (1988a) The capitalization of sovereign debt. Univ Ill Law Rev, p 401Google Scholar
  7. Buchheit L (1988b) Alternative techniques in sovereign debt restructuring. Univ Ill Law Rev 371, 379–381Google Scholar
  8. Buchheit L (1989) Unseating free riders. Int Financial Law Rev, p 14Google Scholar
  9. Buchheit L (1990a) Securitization and original sin. Int Financial Law Rev, p 21Google Scholar
  10. Buchheit L (1990b) The background to Brady’s initiative. Int Financial Law Rev, p 2Google Scholar
  11. Buchheit L (1990c) Overview of the four debt reduction programs: Mexico, Costa Rica, the Philippines, and Venezuela. In: Reisner R, Cardenas E, Mendes A (eds) Latin American sovereign debt management: legal and regulatory aspects. Inter-American Development Bank, pp 77, 81Google Scholar
  12. Buchheit L (1991) Exchanging places. Int’I Fin L Rev, pp. 13, 14Google Scholar
  13. Buchheit L (1992a) You’ll never eat lunch in this conference room again. Int Financ Law Rev, p 11Google Scholar
  14. Buchheit L (1992b) The evolution of debt restructuring techniques. Int Financ Law Rev, p 10, 11Google Scholar
  15. Buchheit L, Reisner R (1988) The effect of the sovereign debt restructuring process on inter-creditor relationships. Univ Ill Law Rev, p 493, 496Google Scholar
  16. Buckley R (1998) The regulation of the emerging markets loan market. Law Policy Int Bus 20:47Google Scholar
  17. Buchheit L (2000) How Ecuador escaped the Brady Bond Trap. Int Financ Law Rev, p 17, 18Google Scholar
  18. Buckley R (2006) Why some developing countries are better placed than the international monetary fund to develop policy responses to the challenges of global capital. Tulane J Int Comp Law 15:121Google Scholar
  19. Burlock J (1985) Legal implications of interest rate caps on loans to sovereign borrowers N Y Univ J Int Law Policy 17:543, 549–551Google Scholar
  20. Carrasco E, Thomas R (1996) Encouraging relational investment and controlling portfolio investment in developing countries in the aftermath of the Mexican financial crisis. Columbia J Transnatl Law 34:539, 550Google Scholar
  21. Carrington T et al (1995) Quick fix: Clinton hastily drops Mexican Rescue plan, gives new aid instead. Wall St J, p AlGoogle Scholar
  22. Chamberlin M, Gruson M, Welschek P (1994) Sovereign debt exchanges. In: Bradlow D (ed) International borrowing: negotiating and structuring international debt transactions, 3rd edn. International Law Institute, pp 525, 533Google Scholar
  23. Cohen S (1988) Give me equity or give me debt: avoiding a Latin American debt revolution. Univ Penn J Int Law 10:86, 94–95Google Scholar
  24. Demirg-Kunt A, Levine R (eds) (2001) Financial structure and economic growth: a cross-country comparison of banks, markets, and development. MIT Press, Cambridge, pp 11–12Google Scholar
  25. Dodd R, Mills P (2008) Outbreak: U.S. subprime contagion. Finance Dev, p 14Google Scholar
  26. Ebenroth CR (1989) The changing legal framework for resolving the debt crisis: a European’s perspective. Int Lawyer 23:629, 633, 649Google Scholar
  27. Elson A (2006) What happened? Why East Asia surged ahead of latrine America and some lessons for economic policy. Financ Dev, p 43Google Scholar
  28. Frank AG (1967) Capitalism and underdevelopment in Latin America. Monthly Review Press, New York, Revised edn 1969, (Penguin Books, London, 1971)Google Scholar
  29. Frank AG, Cockcroft J (1972) Dependence and underdevelopment: Latin America’s political economy. Anchor BooksGoogle Scholar
  30. Gold J (1982) Financial assistance by the international monetary fund, law and practice, 2nd edn. IMF Pamphlet Series No. 27. IMF, pp 11–24Google Scholar
  31. Gold J (1983) Relations between banks’ loan agreements and IMF stand-by arrangements. Int Financial Law Rev, p 28Google Scholar
  32. Guzman A (1998) Capital market regulation in developing countries. Va J Int Law 39:607Google Scholar
  33. Haass R (2008) The age of nonpolarity: what will follow U.S. dominance? Foreign Aff (May/June 2008)Google Scholar
  34. Head J (2010) The global financial crises of 2008–2009 in context–reflections on international legal and institutional failings, fixes and fundamentals. Pac McGeorge Global Bus Dev Law J 23:43, 80–81, 84–86Google Scholar
  35. Hurlock M (1994) New approaches to economic development: the World Bank, the EBRD, and the negative pledge clause. Harv Int Law J 35:347–350, 356Google Scholar
  36. Jayagovind A (1992) The financial facilities of the IMF: development dimensions. In: The right to development in international law. Kluwer Law International, pp 353, 355Google Scholar
  37. Jova J (1975) Private investment in Latin America: renegotiating the Bargain. Texas Int Law J 10:470–473Google Scholar
  38. Kahn M, Knight M (1985) Do fund supported adjustment programs retard growth? Financ Dev, p 30Google Scholar
  39. Krider T (1998) Taking another look at the regulation of mutual funds in the aftermath of the Asian financial crisis. Pac Rim Law Policy 7:427Google Scholar
  40. Levinson J (1992) Multilateral financing institutions: what form of accountability? Am Univ J Int Law Policy 8:47, 49–50Google Scholar
  41. Lichtenstein C (1985) The U.S. response to the international debt crisis: the international lending supervision act of 1983. Va J Int Law 25:401Google Scholar
  42. Lichtenstein C (1994) Aiding the transformation of economies: is the fund’s conditionality appropriate to the task? Fordham Law Rev 62:1943, 1949Google Scholar
  43. Lichtenstein C (1995) The Mexican crisis: who should be a country’s lender of last resort? Fordham Int Law J 10:1771Google Scholar
  44. Link T (1984) The value of bank assets subject to transfer risk. Columbia J Transnatl Law 23:75Google Scholar
  45. Lovett W (1996) Lessons from the recent peso crisis in Mexico. Tulane J Int Comp Law 4:143, 148Google Scholar
  46. Lowell J et al (1998) Financial crises and contagion in emerging market countries. RAND CorporationGoogle Scholar
  47. MacMillan R (1995a) The next sovereign debt crisis. Stanford J Int Law 31:305, 311Google Scholar
  48. MacMillan R (1995b) Towards a sovereign debt work-out system. Northwestern J Int Law Bus 16:57, 67Google Scholar
  49. Maktouf L (1989) Some reflections on debt-for-equity conversions. Int Lawyer 23:909Google Scholar
  50. Matua Mw (1995) Why redraw the map of Africa. Mich J Int Law 16:1113, 1170–1175Google Scholar
  51. Mikesell R (1994) The Bretton woods debates: a memoir. In: Essays in International Finance, No. 192. Department of Economics, Princeton University, p 13Google Scholar
  52. Monteagudo M (1994) The debt problem: the baker plan and the Brady initiative: a Latin American perspective. Int Lawyer 28:59, 62Google Scholar
  53. Newfield D (2016) “Pari Passu as a weapon and the changes to sovereign debt boilerplate after Argentina v. NML. Univ Miami Bus Law Rev 24:175Google Scholar
  54. Ngenda B (1995) Comparative models of privatization: a commentary on the African experience. Brooklyn J Int Law 21:179Google Scholar
  55. Paredes T (2004) A systems approach to corporate governance reform: why importing U.S. corporate law isn’t the answer. William Mary Law Rev 45:1055, 1072–1074Google Scholar
  56. Patton J (2014) Mitigating the problem of vulture holdout: international certification board for sovereign debt restructurings. Texas Int Law J 49:221Google Scholar
  57. Plehn R (1989) Securitization of third world debt. Int Lawyer 23:161Google Scholar
  58. Porzacanski A (2010) When bad things happen to good sovereign debt contracts: the case of Ecuador. Law Contemp Probl 73:251–271Google Scholar
  59. Power P (1996) Sovereign debt: the rise of the secondary market and its implications for future restructurings. Fordham Law Rev 64:2701, 2709Google Scholar
  60. Prebisch R (1971) Change and development Latin America’s great task. Praeger/Pall Mall, New York/LondonGoogle Scholar
  61. Rajagopal B (1993) Crossing the Rubicon: synthesizing the soft international law of the IMF and human rights. Boston Univ Int Law J 11:81Google Scholar
  62. Salacuse JW (1999) From developing countries to emerging markets: a changing role for law in the third world. Int Lawyer 33:875Google Scholar
  63. Sanford J (1995) Foreign debts to the U.S. Government: recent reschedulings and forgiveness George Wash J Int Law Econ 28:345, 359–360Google Scholar
  64. Santos A (1991) Beyond baker and Brady: deeper debt reduction for Latin American sovereign debtors. N Y Univ Law Rev 66:66, 73Google Scholar
  65. Sarkar R (2003) Transnational business law: a development law perspective. Kluwer Law InternationalGoogle Scholar
  66. Schirano A (1985) A Banker’s view. In: Eskridge W Jr (ed) A dance along the precipice: the political and economic dimensions of the international debt problem. Lexington Books, pp 17, 20Google Scholar
  67. Schwarcz S (2012) Sovereign debt restructuring options: an analytical comparison. Harv Bus Law Rev 2:95Google Scholar
  68. Sheng A (1999) The new international architecture: is there a workable solution? Int Lawyer 33:855, 857Google Scholar
  69. Sperber S (1988) Debt-equity swapping: reconsidering accounting guidelines. Columbia J Transnatl Law 26:377Google Scholar
  70. Stiglitz J (2002) Globalization and its discontents. W.W. Norton & CompanyGoogle Scholar
  71. Sudreau M, Bohoslavsky J (2015) Sovereign debt, governance, legitimacy, and the sustainable development goals: examining the principle of responsible sovereign lending and borrowing. Wash Int Law J 24:613Google Scholar
  72. Sweezy P (1942) The theory of capitalist development. Oxford University PressGoogle Scholar
  73. Tanzi V (1986) Fiscal policy responses to exogenous shocks in developing countries. Am Econ Rev 76:88–90Google Scholar
  74. UNICEF (1987) In: Comia GA, Jolly R, Stewart F (eds) Adjustment with a human face: protecting the vulnerable and promoting growth, vol 1. Clarendon PressGoogle Scholar
  75. Vernava A (1996) Latin American finance: a financial, economic and legal synopsis of debt swaps, privatizations, foreign direct investment law revisions and international securities issues. Wis Int Law J 15:89, 96, 112Google Scholar
  76. Weidemaier WM, Gulati M (2015) The relevance of law to sovereign debt. Am Rev Law Soc Sci 11:395CrossRefGoogle Scholar
  77. Wertman P (1995) The Mexican support package: a survey and analysis. Mex Trade Law Rep 5(9):19, 22–23Google Scholar
  78. Wessel D, Torres C (1997) Mexico will close out its debt to U.S.: earlier repayment marks both livelier economy, access to bond markets. Wall St J, p A10Google Scholar
  79. Zacharia F (2008) The future of American power: how America can survive the rise of the rest. Foreign AffGoogle Scholar

Copyright information

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2020

Authors and Affiliations

  • Rumu Sarkar
    • 1
  1. 1.General CounselMillennium PartnersCharlottesvilleUSA

Personalised recommendations