Crisis Resolution: Next Steps
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
At the April 2003 meeting of the International Monetary and Financial Committees, it was decided to further encourage the contractual approach to smoothing the process of sovereign debt restructuring by encouraging the more widespread use of collective action clauses (CACs) in international bonds. This decision was shaped partly by Mexico's successful launch of a bond subject to New York law but featuring CACs, and by subsequent issues with similar provisions from other emerging market countries. This paper reviews the developments leading up to that event, its implications, and prospects for the future. It asks whether we can expect to see additional issuance by emerging markets of bonds featuring CACs, whether such a trend would in fact help to make the world a safer financial place, and what additional steps might be taken to further enhance modalities for crisis resolution.
Series:
Working Paper No. 2003/196
Subject:
Bonds Collective action clauses Credit ratings Emerging and frontier financial markets Financial institutions Financial markets Financial sector policy and analysis Money Moral hazard
English
Publication Date:
October 1, 2003
ISBN/ISSN:
9781451859980/1018-5941
Stock No:
WPIEA1962003
Pages:
58
Please address any questions about this title to publications@imf.org