Derek Hunter
About as serious as a UN resolution that the United States
voted against, but an important step nonetheless. On August 28th, the UN
General Assembly passed a resolution
that calls on member nations to engage in multilateral negotiations with the
aim of establishing a comprehensive legal framework to provide a fair and
efficient sovereign restructuring process. The impetus for this resolution is
clear: Argentina’s
second debt default in a little over a decade, which again
demonstrated how a few obstinate U.S.-based hedge funds can drive an entire
nation into default.
The ideas embodied in the resolution are not entirely new
and are sometimes referred to as “Sovereign Chapter 11,” which the BBC discussed last week.
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