Bondholders won't back new principles

by Felix Salmon

Top bankers' talking shop the Institute of International Finance and the G-20 group of sovereign borrowers have proudly unveiled a new set of principles for orderly restructuring of sovereign debt. The Argentina fiasco underscores the urgent need for such an agreement. Unfortunately, this one was negotiated without much input from the most important groups of creditors.

The kind of private-sector
representative the official
sector likes to deal with

THE PRESS CONFERENCE at the Institute of International Finance (IIF) at the end of last month was a grand affair. The great and the good present included Jacques de Larosière, former head of the Banque de France, the IMF and the European Bank for Reconstruction and Development. "You are attending a meeting which is to some extent historical," he told journalists. "Issuing countries and the private sector have gotten together and have agreed on a set of principles: this in itself is a great achievement." He waxed almost poetical. "We have tried to bring out the quintessence of what is good and what is rational," he said.

The chaos of Argentina's attempt to resolve its default has highlighted again the worrying absence of agreed procedures for sovereign debt workouts. So, on the surface, such an agreement appears welcome.

...

You must be a trialist or subscriber to view this content

Please Subscribe or take a Free Trial below.
Already a subscriber? Log in here.

Euromoney’s 2012 FX survey results

The money network:

Bondholders won't back new principles

You must be a trialist or subscriber to view this content

Related articles

FX survey 2012: Overall results

Euromoney’s 2012 FX survey results

Inside JPMorgan's $2 billion loss-making CIO division

The money network: Why crowdfunding threatens traditional bank lending

Global banks poised for Africa growth

Macaskill on markets: Biting off Moore than can be chewed

The money network: Why crowdfunding threatens traditional bank lending

Crowdfunding industry set to pass $3 billion mark

Facebook flop underscores questions over valuation

ECM outlook dims as volatility returns

Eurozone's future hangs in the balance amid Spanish crisis

FX survey 2012: Results index

Bondholders won't back new principles

You must be a trialist or subscriber to view this content

Subscribe online today

Free 48 hour access

Related articles