Towards a Multilateral Framework for Recovery from Sovereign Insolvency
Working Paper #292
This chapter proposes that the UN General Assembly formulates a set of principles to guide governments and international institution creditors when restructuring sovereign debt and guide the IMF as representative of the international community in assessing restructuring needs. The principles would also guide national courts which would oversee restructuring of sovereign bonds and bank loans issued under national law. An innovative feature is that UNCITRAL would prepare a model law for national governments that would provide common guidance across jurisdictions for court supervision of restructuring of private claims. While sovereigns would continue to negotiate restructurings separately with each class of creditors, the indebted government or creditor groups could appeal the workout to the Permanent Court of Arbitration in The Hague for violating the principles.
About the Author
Visiting Senior Fellow, Graduate Program
The New School
Barry Herman (Ph.D., University of Michigan) is Visiting Senior Fellow at the Graduate Program in International Affairs of The New School in New York. He has been a member since its founding in 2010 of the Advisory Board of Social Justice in Global Development e.V., an international NGO registered in Germany that promotes reform of global development policies and improved global economic governance by preparing papers and organizing seminars and conferences for information exchange, advocacy and development education (www.socdevjustice.org). Also, from its inception in 2005 until end 2011, he was a member of the Board of Directors of Global Integrity, a research NGO based in Washington that works with independent scholars and investigative reporters on assessing laws, institutions and practices to improve governance and limit corruption in developed and developing countries. In addition, from 2004 to 2009 he co-chaired the Task Force on Debt Restructuring and Sovereign Bankruptcy at the Initiative for Policy Dialogue at Columbia University. He completed almost 30 years in the United Nations Secretariat in 2005, the last two years of which were as Senior Advisor in the Financing for Development Office in the Department of Economic and Social Affairs (DESA). He consults with various offices of the United Nations and other official bodies and non-governmental networks on international economic and financial policies (most recently, the World Council of Churches in 2012).