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From Prof Rob Howse.
Sir, Aldo Caliari and José Antonio Ocampo (“Argentina’s bondholders deserve their day in court”, Opinion, July 10) rightly call for “a formal institutional framework for debt restructuring”.
A working group has recently been appointed by the UN Conference on Trade and Development secretariat to design just such a mechanism, which has begun its deliberations this summer. The group, of which I am a member, involves the participation of a wide range of institutions (including the IMF, the World Bank and the Paris Club) and stakeholders, including civil society and the private sector.
Mr Caliari and Professor Ocampo are surely correct that one essential challenge in designing a sovereign debt workout mechanism is to manage effectively collective action problems, such as holdouts. There is also the overarching goal of achieving equity or fairness between all those affected by sovereign debt crises, including not only creditors and sovereigns but vulnerable groups in both debtor and creditor nations.
Rob Howse, Lloyd C. Nelson Professor of International Law, New York University Law School, New York, US