The Western powers established the International Monetary Fund (IMF) and the World Bank after World War II as “permanent machinery” to anchor the Bretton Woods system. When developing countries began experiencing debt problems in the late 1960s, the Paris Club took shape as “ad hoc machinery” to restructure debt from export credit agencies. A decade later the London Club process emerged to handle workouts of commercial bank debt. Restructuring debt in the form of bonds became an issue in the late 1990s in Argentina and several other nations, and the IMF recently proposed a permanent mechanism to deal with that challenge. Restructuring Sovereign Debt explains why ad hoc machinery would function more effectively in the Bretton Woods system. By describing in detail the origins and operations of the London Club and Paris Club, Lex Rieffel highlights the pragmatism and flexibility associated with ad hoc approaches. He also recalls earlier proposals for creating permanent debt restructuring machinery and the reasons why they were not adopted. Recognizing that the issue of sovereign debt workout is complex, Rieffel has provided a comprehensive and detailed exposition of this important policy issue. Rieffel’s book is an important tool for policymakers and the public, particularly as the global community seeks to resolve the debt problems of countries as diverse as Argentina, Iraq, and Côte d’Ivoire.

Click Here For More Information

August 8th, 2017

Posted In: Debt Relief

Tags: , , , ,

One Comment

  • Rolf Dobelli says:

    A Good Read! Author Lex Rieffel writes with authority on the history of developing countries’ debt crises. He describes this difficult and complex subject concisely and meticulously. To be sure, he wrote this text as an argument for a specific policy objective (keeping flexibility in the sovereign debt workout process), and does not shy away from hammering his point home multiple times. However, his agenda in no way diminishes the accuracy of his history or his factual descriptions of the entities that…

Leave a Reply