More than 400 of the world’s largest banks, investors and debt issuers have agreed a plan for dealing with financially stricken countries and their creditors, in a bid to prevent a repeat of the wrangling that has pushed Argentina into default.
After months of talks convened by the US Treasury, in the wake of Greece’s restructuring, debt experts will today unveil a framework that could transform the relationship between indebted nations and lenders. Lawsuits filed by creditors against defaulting governments have doubled in the past decade and the changes come at a time when levels of sovereign debt have risen to record highs.
The fallout from recent defaults reignited calls for an international bankruptcy court, but market participants and Washington authorities favour a voluntary response, rather than new statutory mechanisms.