Market resists restructuring reform
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Market resists restructuring reform

Sovereign debt

       
Anne Krueger

Anne Krueger is triumphant. At the IMF's annual meetings this year, the first deputy managing director saw her pet project - a sovereign debt restructuring mechanism, or SDRM - endorsed by everyone who matters, from the G7 to the Fund's own international monetary&financial committee (IMFC).


Everyone, that is, except for the two constituencies at which it is squarely aimed: emerging-market borrowers and private-sector lenders.


All the same, it is a stunning achievement for Krueger and the IMF. When Krueger first mooted the idea in November, the US Treasury immediately shot back with a more market-friendly counter-proposal, and SDRM was generally considered mortally wounded. But it didn't die: it simply changed shape and came back, with important changes, in April. Even an unprecedented unanimous attack from an alphabet soup of private-sector trade groups failed to stop the resuscitation: the combined forces of banks (IIF, IPMA), traders (EMTA, SIA, TBMA) and bondholders (EMCA) were powerless to stop the resuscitation of the new SDRM.



Gift this article