Strengthening the International Financial Architecture: Sovereign Debt Restructuring Mechanism (SDRM)—A Factsheet

The IMF and the Private Sector—A Factsheet

More Information on Sovereign Debt Restructuring





Reviewing the Process for Sovereign Debt Restructuring within the Existing Legal Framework

Prepared by Policy Development and Review, International Capital Markets, and Legal Departments
(In Consultation with other Departments)

Approved by: Gerd Häusler, François Gianviti, and Timothy Geithner

August 1, 2003

This paper has not been discussed by the Executive Board of the IMF and, as such, may not represent the views of Executive Directors. The paper was prepared by Fund staff, and is intended to facilitate further discussion of the issues.

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Contents

I. Introduction
II. The Existing Process for Sovereign Debt Restructurings
III. Addressing Shortcomings in the Current System
  A. Information disclosure to creditors
  B. Enhancing dialogue and coordination
  Consultation between a debtor and its creditors in the context of restructuring
  Coordination among official bilateral and private creditors
C. Institutionalizing Dialogue and Mediation Services
D. Techniques to resolve collective action problems
IV. Concluding observations

Tables

1.

Recent Cases of Debt Restructuring

Boxes

1.

Analysis of Sovereign Balance Sheets and Information Needs
2. Handling Confidential Information
3. Debt Registry
4. Two Examples of Collective Action Problems
5. Collective Action Clauses and Exit Consents
Annexes
1. Argentina-The Process Toward Sovereign Debt Restructuring
2. The Uruguay Debt Restructuring
3. Treatment of Debt Restructurings by Credit Rating Agencies