Sky Blog
There is a venerable history of interdependence between sovereign debt and the financial system. The national banking system in the U.S. arose as a solution to fiscal challenges the Union government faced in the Civil War. A key requirement for …
Tariffs have been front-page news for the last few months, virtually since the moment that the Trump Administration came into office. Along with this news has come considerable commentary on the impact the tariffs may have on the U.S. and …
On October 16, 2024, the Republic of El Salvador (“El Salvador”) announced the financial close of a $1 billion debt-for-nature (“DFN”) swap, which was both the world’s largest conservation-focused operation of this kind to date and the world’s largest DFN …
The New York State Legislature is again considering a proposed law with potential implications for sovereign debt. Entitled the “Sovereign Debt Stability Act,” it combines two previous legislative proposals from the 2023 legislative session.[1] Those proposals sought to: (i) …
Funds that speculate in sovereign debt, so-called “vulture funds,” are often roundly criticized. They purchase distressed debt on the secondary market at reduced prices and then seek payment in court at face value plus interest, penalties, and fees.[1] Although …
The interplay between sovereign debt defaults and legal frameworks has long been a subject of scholarly discourse and practical concern. Navigating this labyrinthine arena necessitates a rigorous understanding of various legal paradigms, one of which is trust law. In a …
In the past few years, the economies of developing countries and emerging markets have been upended by the once-in-a-century COVID-19 pandemic and the fallout from the war in Ukraine. As a result, these economies have suffered from a array of …
In late March, Argentina and the IMF agreed on a new arrangement that would enable Argentina to avoid falling into arrears on the IMF’s 2018 loan. However, the agreement was reached only after protracted and tortuous negotiations that dragged on …
In a new article, I discuss the impact of the currently turbulent global economic environment on the prospect for sovereign debt defaults and restructurings in emerging economies. I also review three types of emerging markets sovereigns that may be at …
Some countries have a compelling argument for why they should not be expected to join the planetary effort to fight climate change. These are countries facing the need to restructure their external debt. By definition, sovereigns that cannot pay what …
Venezuela is facing not only a grave humanitarian crisis, but an acute financial and economic one as well–including a massive debt burden. Moreover, Venezuela is in the throes of an extended political stalemate between the forces aligned with the regime …
Global greenhouse gas (GHG) emissions decreased by 6.4% in 2020, largely due to the COVID-19 pandemic. While encouraging at first glance, many climate change experts have pointed out that this result will have hardly any long-term effect on curbing climate …
On July 31, 2020, Judge Caproni in the Southern District of New York denied an emergency motion filed by certain bondholders for a temporary restraining order that would have halted efforts by the Republic of Ecuador (“Ecuador”) to restructure $17.4 …
As of May 1, G20’s Debt Service Suspension Initiative (DSSI) for 76 International Development Association (IDA) countries and least developed countries (LDCs) has become operational. However, it remains unclear whether private-sector creditors will collaborate on such efforts for those countries, …
One of the repercussions of the housing market collapse in the U.S. in 2007 was global anxiety about excess leverage, debt repayment, and overall credit conditions. Risk-pricing levels increased abruptly for highly indebted countries, making new borrowing to refinance debt …
For almost two years, Argentina has been facing a severe economic recession and has not had the ability to access international capital markets. This has been due to several factors, including a general capital flight from emerging markets following the …
On November 2, 2017, President Maduro of the Bolivarian Republic of Venezuela announced the creation of a presidential commission, headed by Vice President El Aissami, for the “refinancing and restructuring” of Venezuela’s external debt, estimated at between US$100-150 billion.1…
In December 2015, Ukraine defaulted on a $3 billion loan made two years previously by the Russian government. Governments lend to one another all the time, but this loan was extraordinary, and so were the events that followed in its …
As sovereign borrowers and their creditors know all too well, the legal framework governing their respective rights and obligations (the so-called international financial architecture) lacks an effective means to enforce payment in most circumstances or to modify payment obligations when …