Argentina gambled, and the gamble paid off. By bullying private creditors into accepting a pitiful settlement on its $100bn (£52bn) debt restructuring it has rewritten the rules of the game in emerging market finance. It proved that debtor countries have a lot of power in their dealings with bondholders. This increases the risk involved in lending to emerging markets and should push up interest rates on emerging market debt.

Argentina and the International Monetary Fund now have to decide where to go next. The fund should make it clear that it will resume lending to Argentina only under strict conditions. Argentina should quit gambling while it is ahead and make its peace with the international financial system. Without normalisation of financial relations abroad and structural reforms at home, its triumph will prove short lived.