Facilitating restructurings, Microeconomics

Facilitating Restructurings- rationale in era of globalisation:

There has been some progress in the last few years in efforts to improve the framework for sovereign restructurings. In particular, collective action clauses have become the market standard where emerging market governments issue debt under foreign law. The Bretton Woods institutions should be willing to lend to a sovereign that is in default to its private creditors only when two conditions have been established. One, the country must commit to a credible medium-term adjustment programme, one that offers that prospect of a successful restructuring and a reasonably early return to the capital markets. This has to be established upfront for any restructuring effort to work. Commitment to a credible adjustment path that offers the reasonable prospect of a return to financial visibility and growth is the necessary foundation for engagement by the creditors in a restructuring process. Without that, there is little
basis for meaningful engagement.

Two, before an institution can commit its support, the country must develop, in consultation with its advisors, and outline to the institution and its creditors, a credible and monitorable framework for cooperatively achieving a viable debt restructuring, one that leaves the country with a sustainable debt burden. The issues of appropriate adjustment and appropriate broad terms of proposed restructuring are closely intertwined and need to be assessed in tandem. For the BW institution, it should be an essential prerequisite that the country demonstrate at the outset that its approach has credible prospects for enlisting broad credit concurrence, and for being consistent with country's macroeconomic framework and payment prospects. 

 

Posted Date: 11/9/2012 6:35:57 AM | Location : United States







Related Discussions:- Facilitating restructurings, Assignment Help, Ask Question on Facilitating restructurings, Get Answer, Expert's Help, Facilitating restructurings Discussions

Write discussion on Facilitating restructurings
Your posts are moderated
Related Questions

REGIONAL FINANCIAL INSTITUTIONS: You have read about regional international trading blocs in Block 5 Course MEC 007 International Trade and Finance. This unit deals with regio

identify which curve (demand or supply) will be affected?

Unions are Organizations of working people which aim to bargain collectively with employers in order to improve workers' bargaining power, regulate working conditions and raise wag

Phillips Curve and Inflation-Unemployment in policy making : In the General Theory (Keynes, 1936) we noted that the state of expectations was taken as given. There was, in ad


What are the important functions to maximize total surplus? The market equilibrium maximizes total surplus since the market performs four significant functions are as follows:

Production: - Firms should choose how much of each to produce. - The alternative quantities can be illustrated by using product transformation curves. Product Transforma

Find a recent hostile takeover in Europe and compare the European takeover tactics and defences to those tactics and defences in US. In your opinion do you think the targeted firm

The demand functions for two related commodities are expressed as follows    Q 1 = (12P 2 3/4 ) / (P 1 1/2 ) Q 2 = (24P 1 2 ) / (P 2 3/5 ) Where Q 1  and Q 2 are d